Home > Market Research > Mobile Strategies > Slicing up the Mobile Services Revenue Pie

Table of Contents

Market Study
Published: January 2008
Pages: 136
Tables: 100
From: GBP 1495.00   Buy Now!
Research from: Portio Research
Sector: Mobile Strategies

This report will explain to you which services generate the most revenue and where that money goes to, looking at how mobile network operators share the revenue with handset vendors, content partner and other players in this massive USD 900 Billion Dollar industry.

Key features of this detailed new market study:

-Full regional subscriber forecasts
-Full handset shipment and revenue forecasts
-Analyze the flow of cash in this 900 Billion Dollar business
-Detailed revenue forecasts to 2011 for SMS, MMS, mobile video, music, games and much more
-Understand the true value of the worldwide mobile industry
-Find out which services the money comes from
-Find out where the money goes to
-Analyze data services, see the value of SMS, MMS, mobile email, mobile music, mobile TV and more
-Examine regional revenue data

About this market study

The very first mobile telephones, huge briefcase-sized devices, first appeared in the 1980s and towards the end of that decade a nascent mobile phone industry was emerging. According to industry research, forecasts predict that 2008 will be the year that the worldwide mobile industry becomes a one Trillion US Dollar industry. For an industry to go from zero to USD 1 trillion in just 20 years is a staggering achievement, equal to a CAGR of almost 30 percent sustained for 20 years, an achievement previously unequalled by any other industry at any time in human history. 2007 became the year to see worldwide mobile handset shipments exceed 1 billion for the first time, and as 2008 begins so the world also crosses the highly significant 50 percent mobile penetration point, and the industry enters a year where gross industry revenues are set to reach 1 trillion Dollars.

As simple voice and text messaging services have become commoditised, prices and margins have come under intense pressure, forcing mobile network operators to expand non-voice mobile services to gain competitive advantage. A wide variety of value-added non-voice services have emerged, from mobile music, to email, mobile TV and video downloads, location based services, games, gambling and mobile payment services. In 2007, worldwide, non-voice services accounted for 18.9 percent of total mobile services revenues, and this figure looks set to keep growing, reaching more than 25.5 percent by the end of 2012. To put that in context, worldwide consumer spending on non-voice mobile services in 2012 will exceed 251 Billion US Dollars - more than a quarter of a trillion Dollars per annum.

From the start, this report sets out to answer these key questions:

1) What is the overall value of the worldwide mobile industry?

2) Where does the money come from?

-Which services?
-Which geographical regions?

3) Where does the money go to?

-Handset vendors?
-Infrastructure equipment vendors?
-Retained by network operators?
-Content partners?

4) How will these revenue flows change over the coming years?

5) Where is the real money now, which services make the most money, and which services are making the most profit?

6) How does the value of these services change across different regions and markets?

In 2008 we estimate MNOs worldwide will collect total revenues of USD 874.3 Bn. Interestingly, voice and SMS get little publicity in the mobile world these days. Just take a look at the conference agenda for the annual Mobile World Congress in Barcelona in February 2008. Looking down the list of topics covered in the 4 day conference, all the talk is about mobile TV and video, HSPA, mobile IM, DRM, mobile finance, mobile search, social networking, data pricing and mobile enterprise solutions.

All of these are exciting growth areas and most of these topics offer a great deal of promise for the future. But amid all this excitement, there is barely one mention of voice as a subject, and barely any mention of SMS as an application, yet voice and SMS generate well over 80 percent of the total service revenues flowing into this industry right now, and it’s predominantly voice and SMS that have built this USD 1 trillion business over the last 20 years. Our forecasts show that in 2008, 88.9 percent of total MNO service revenues worldwide will come from voice and SMS, and that figure is likely to remain as high as 85 percent even by the end of 2011. But that still leaves more than USD 161 billion from data services in 2008, rising to over USD 251 by 2011, and this report looks in detail at those services to see where the money is coming form and how it's split out among the various players in the value chain.

We analyze the MNOs share in content revenues and we look in detail at how that share is changing over the next 4 or 5 years.

Top of Page

Table of Contents

Contents
Introduction ..6
Worldwide Mobile Market 9
Mobile Data Services .18
Introduction 18
SMS.. 22
Market Overview ..22
Value Chain Analysis 24
Case Study 1 – India’s SMS Market.26
Case Study 2 – The UK’s SMS Market 30
Case Study 3 – The US’s SMS Market 34
MMS . 36
Market Overview ..36
Value Chain Analysis 38
Case Study 1 – The US’s MMS Market39
Case Study 2 – The UK’s MMS Market41
Case Study 3 – China’s MMS Market43
Mobile E-mail 45
Market Overview ..45
Mobile IM .. 49
Market Overview ..49
Value Chain Analysis 52
Mobile Video Services (Mobile TV and Mobile Video Downloads). 53
Market Overview ..53
Case Study 1 – Italy’s Mobile TV Broadcasting Market59
Case Study 2 – South Korean Mobile TV Broadcasting Market 61
Mobile Music. 63
Market Overview ..63
Value Chain Analysis 68
Case Study 1 – UK’s Mobile Music Market ..70
Case Study 2 – India’s Mobile Music Market73
Case Study 3 – The US’s Mobile Music Market 75
Mobile Games 78
Market Overview ..78
Value Chain Analysis 80
Case Study 1– Japan’s Mobile Gaming Market 83
Case Study 2 – The US Mobile Gaming Market85
Case Study 3 – The Mobile Gaming Market in the UK .87
Other Services .. 89
Mobile Payment Services.90
Mobile Gambling ..92
Location-based Services ..94
Mobile Internet 95
Infrastructure Equipment Vendors96
Market Overview 96
Mobile Handset Market ..99
Market Overview 99
Conclusions 104
Trillion Dollar Mobile104
Shifting Trends in the Mobile Data Services Market114
Beyond Messaging117
Infrastructure Equipment Vendors..120
Mobile Handset Market ..120
Appendices. 122
Glossary 123
Portio Research Classifications..133
Companies Mentioned in this Report .134
About the Authors..136
© 2007, Portio Research. All Rights Reserved 2
Slicing Up the Mobile Services Revenue Pie
Also available from Portio Research Limited..138
List of Figures
Figure 1: Comparison of Mobile Market with Other Sectors – Revenue (In USD Billion, In 2006) 6
Figure 2: Comparison of Mobile Market with Other Sectors – Y-o-Y Growth Rate (2006) 7
Figure 3: Comparison of Mobile Market with Other Sectors – Y-o-Y Growth Rate (2007E) . 7
Figure 4: Worldwide Mobile Subscribers (In Million, 2004-2012E) 9
Figure 5: Net Subscriber Additions – Regional Break-out (In Million, 2007E-2012E) ..10
Figure 6: Worldwide Mobile Revenue (In USD Billion, 2004-2012E)11
Figure 7: Worldwide Service Revenue and Equipment Sales (In USD Billion, 2004-2012E)12
Figure 8: Worldwide Mobile Service Revenue – Regional Break-out (2004 and 2012E)13
Figure 9: Worldwide Mobile Service Revenue – Voice-Data Split (2004 and 2012E)..14
Figure 10: Worldwide Mobile Voice Revenue (In USD Billion, 2004-2012E) 15
Figure 11: Worldwide Mobile Voice Revenue as a percentage of Service Revenue (2004-2012E) .16
Figure 12: Worldwide Data Services Revenue – Break-out (2006 and 2011E) 19
Figure 13: Worldwide Data Revenue Sharing Arrangement (2006 and 2011E) 20
Figure 14: MNOs share in Data Revenue Break-out (2006 and 2011E)21
Figure 15: Worldwide SMS Traffic Volumes (In Billion, 2006-2011E)23
Figure 16: Worldwide SMS Revenue (In USD Billion, 2006-2011E).23
Figure 17: Premium SMS – Value Chain ..24
Figure 18: SMS-based Enterprise Services – Value Chain ..25
Figure 19: India – Mobile Data Services Revenue (In USD Billion, 2004-2007E).26
Figure 20: India – Mobile Data Services – Revenue Break-out (2006).27
Figure 21: India – SMS Revenue Break-out (2006)..27
Figure 22: India – Revenue Sharing Arrangement – Premium SMS Services (2006 and 2011E) 28
Figure 23: India – SMS-based Enterprise Services – Revenue Break-out 29
Figure 24: UK – SMS Traffic Volumes (In Billion, 2004-2007E)30
Figure 25: UK – SMS Traffic Volumes (In Billion, January-May 2007) .31
Figure 26: UK – SMS Revenue (In USD Billion, 2005-2007E)..31
Figure 27: UK – Premium SMS Services – Revenue Sharing Arrangement in Case of Large Content
Owners (2006)32
Figure 28: UK – Premium SMS Services – Revenue Sharing Arrangement in Case of Small Content
Owners (2006)32
Figure 29: UK – Premium SMS Revenue Sharing Arrangement (2011E).33
Figure 30: US – Premium SMS Revenue Sharing Arrangement (2006) ..34
Figure 31: US – Premium SMS Revenue Sharing Arrangement (2011E)35
Figure 32: Worldwide MMS Traffic Volumes (In Billion, 2006-2011E) ..36
Figure 33: Worldwide MMS Revenue (In USD Billion, 2006-2011E) 37
Figure 34: A2P MMS – Value Chain.38
Figure 35: US – Data Services Revenue Break-out (2006) ..39
Figure 36: US – Revenue Sharing Arrangement – MMS (Except P2P) (2006, 2011E) 40
Figure 37: UK – Data Services Revenue Break-out (2006) ..41
Figure 38: UK – Revenue Sharing Arrangement – MMS (2006)42
Figure 39: UK – Revenue Sharing Arrangement – MMS (2011E) 42
Figure 40: China – Revenue Sharing Arrangement – MMS except P2P (2003 and 2006) 44
Figure 41: China – Revenue Sharing Arrangement – MMS except P2P (2011E).44
Figure 42: Worldwide Mobile E-mail Revenue (In USD Billion, 2006-2011E) 45
Figure 43: Worldwide Mobile E-mail Subscribers (In Million, 2006-2011E) ..46
Figure 44: Mobile Enterprise E-mail – Value Chain ..47
Figure 45: Worldwide Mobile IM Subscribers (In Million, 2006-2011E).49
Figure 46: Worldwide Mobile IM Revenue (In USD Billion, 2006-2011E) .50
Figure 47: Mobile TV (Broadcast Based) – Value Chain ..54
Figure 48: Mobile TV (Cellular Based) – Value Chain ..55
Figure 49: Mobile Video Download – Value Chain 56
Figure 50: Worldwide Mobile TV Subscribers (In Million, 2006, 2007E and 2010E).56
Figure 51: Worldwide Mobile Video Services Revenue (In USD Billion, 2006-2011E) .57
Figure 52: Italy – Mobile TV Subscribers (In Million, 2006-2010E) 59
© 2007, Portio Research. All Rights Reserved 3
Slicing Up the Mobile Services Revenue Pie
Figure 53: Italy – Mobile TV Broadcasting – Value Chain.60
Figure 54: SK Telecom – Mobile TV Broadcasting – Value Chain61
Figure 55: Worldwide Mobile Music Revenue (In USD Billion, 2006-2011E)63
Figure 56: Revenue Composition – Mobile Music (2006 and 2011E)65
Figure 57: Worldwide Ringtone Revenue (In USD Billion, 2006-2011E) ..66
Figure 58: Worldwide Streaming Audio Revenue (In USD Million, 2006-2011E)..66
Figure 59: Worldwide Full-track Mobile Music Download Revenue (In USD Million, 2006-2011E)67
Figure 60: Worldwide Ring-back Tone Revenue (In USD Million, 2006-2011E)67
Figure 61: Mobile Music Services – Value Chain .68
Figure 62: Mobile Music Services – Revenue Sharing Arrangement (2006 and 2011E) ..68
Figure 63: Penetration – Music-enabled Handsets (1 November 2006–31 January 2007)70
Figure 64: UK – Mobile Download Market – Break-out (2006) .71
Figure 65: UK – Revenue Sharing Arrangement of Polyphonic Tones (2006)..71
Figure 66: UK – Revenue Sharing Arrangement of True Tones (2006)72
Figure 67: Mobile Music Services – Revenue Sharing Arrangement (2006 and 2011E) ..72
Figure 68: India – Mobile Music Download Break-out (2006) 73
Figure 69: Mobile Music Service – Revenue Sharing Arrangement (2006 and 2011E)74
Figure 70: US – Mobile Music Revenue (In USD Million, 2004-2006) ..75
Figure 71: US – Changing Patterns of Ringtone Service (2004-2006) .75
Figure 72: US – Revenue Sharing Arrangement of Polyphonic Tones (2006)..76
Figure 73: US – Revenue Sharing Arrangement of True Tones (2006)77
Figure 74: Mobile Music Services – Revenue Sharing Arrangement (2006 and 2011E) ..77
Figure 75: Worldwide Mobile Gaming Revenue (In USD Billion, 2006-2011E).78
Figure 76: Mobile Gaming – Value Chain.81
Figure 77: Worldwide Mobile Gaming – Revenue Sharing Arrangement (2006, 2011E)..81
Figure 78: Japan – Mobile Gaming Service Revenue (In USD Million, 2004–2006).83
Figure 79: NTT DoCoMo – Revenue Sharing Arrangement – Mobile Games (2006)84
Figure 80: US – Mobile Gaming Services Revenue (In USD Million, 2004–2006)85
Figure 81: US – Mobile Gaming – Revenue Sharing Arrangement (2006, 2011E)..86
Figure 82: UK – Mobile Gaming – Revenue Sharing Arrangement (2006, 2011E)..88
Figure 83: Revenue from Other Data Services (In USD Billion, 2006–2011E) .89
Figure 84: Mobile Payment Services – Value Chain.90
Figure 85: South Korea – Mobile Payment – Revenue Sharing Arrangement (2006) ..91
Figure 86: Worldwide Infrastructure Vendor Revenue (In USD Billion, 2006–2011E) ..96
Figure 87: Worldwide Handset Shipments (In Million, 2006–2011E)99
Figure 88: Worldwide Handset Revenue (In USD Billion, 2006–2011E).100
Figure 89: Worldwide Handset Sales to Operators (In USD Billion, 2006–2011E) .100
Figure 90: Worldwide Market Share Comparison – by Handset Vendor (2005 and 2006) .102
Figure 91: Handset Shipments – Regional Break-out (2006 and 2011E) 103
Figure 92: Worldwide Mobile Revenue and Total Handset Sales (In USD Billion, 2004-2011E) 104
Figure 93: Voice and SMS Revenue as Percentage of Service Revenue (In Percent, 2006-2011E)
105
Figure 94: Worldwide Mobile Market – Break-out by Services and Handset Sales (In USD Billion,
2006, 2007E and 2011E)106
Figure 95: Worldwide Mobile Market – Who makes how much? (2006 and 2011E)108
Figure 96: Worldwide Mobile Revenue – Regional Break-out (2006 and 2012E)..109
Figure 97: Worldwide Mobile Market – Service Revenue and Handset Sales – Regional Break-out
(In USD Billion, 2006,2007 and 2011E).110
Figure 98: Worldwide Mobile Revenue – Regional Contribution (2006 and 2011E) 112
Figure 99: Worldwide Mobile Data Services Revenue – Regional Break-out (2004 and 2012E)114
Figure 100: Data Services Value Chain (In USD Billion, 2006 and 2011E) ..119
List of Tables
Table 1: Regional Mobile Subscribers (In Million, 2004-2012E).10
Table 2: Worldwide Mobile Revenue – by Region (In USD Billion, 2004-2012E)11
Table 3: Worldwide Mobile Service Revenue – by Region (In USD Billion, 2004-2012E)..12
4 © 2007, Portio Research. All Rights Reserved
Slicing Up the Mobile Services Revenue Pie
Table 4: Worldwide Mobile Voice Revenue – by Region (In USD Billion, 2004-2012E).15
Table 5: Average Revenue per Minute (RPM) (In USD, Q2 2007).16
Table 6: Forecasted Worldwide Mobile E-mail Subscribers (In Million, 2006-2011E) 46
Table 7: Handset Vendors and Operating System Providers .48
Table 8: Worldwide Mobile IM Subscribers – Regional Break-out (In Million, 2006-2011E)50
Table 9: Worldwide Mobile Music Services Revenue (In USD Billion, 2006-2011E)..64
Table 10: Quarterly Handset Shipments Worldwide (In Million, Q1, 2006 - Q3, 2007)..101
Table 11: Worldwide Voice and Data Services Revenue (In USD Billion, 2004-2012E)113
Table 12: Worldwide Mobile Data Services Revenue –Regional Break-out (In USD Billion, 2004-
2012E) 115
Table 13: Worldwide Mobile Data Services Revenue – Break-out (In USD Billion, 2006-2011E) .116

For full details, please email keithw@cmsinfo.com

Top of Page

Buy now!

1-5 user team licence

 GBP 1495.00   

Small or medium size PDF compa

 GBP 2495.00   

Large corporate PDF unlimited

 GBP 3995.00   

Your personal guarantee

Top of Page