Entertainment will drive US mobile revenues

MUMBAI: Non-voice services will account, on average, for 13.3 per cent of total service revenues for US mobile operators in 2006 and this is set to grow to 24.5 per cent by 2011, according to The US Mobile Market: trends and forecasts 2006-11, a new report published by Analysys, the global advisers on telecoms, IT and media. The biggest driver of this growth is entertainment services, although messaging is also a major contributor.

US mobile operators’ revenues from mobile entertainment services are expected to total $5.2 billion in 2006, growing to over $7 billion in 2007.

“The market will be spurred on both by increasing adoption of 3G handsets and by service innovation, stimulated in part by new-entrant MVNOs. In addition, recent spectrum auctions in the USA have given operators the spectrum they need to increase coverage and capacity of both CDMA2000 1 x EV-DO and HSDPA-enabled WCDMA networks,” says prinicpal analyst and co-author of the report Danny Dicks.

“Mobile data services gained prominence significantly later in the USA than in other developed markets, such as Japan and Western Europe. However, they are catching up quickly. Unlike in Europe, entertainment services, and not person-to-person messaging, are the key revenue generators,” says senior analyst Alex Zadvorny, the report’s co-author.

“We expect most entertainment services to be delivered over cellular networks, with broadcast TV ultimately making only an incremental contribution to the overall revenue,” he adds.

Analysys also predicts continued rapid increases in most person-to-person messaging services for the next five years, with mobile email and instant messaging (IM) growing particularly fast.

“In revenue terms, text messaging will continue to be the most important messaging service but email and IM will catch up, particularly as operators continue to price bundles in a way that does not drive subscribers to choose one particular form of message over another. We estimate that, in 2006, text messaging will account for less than 50 per cent of all revenues from person-to-person messaging,” says Zadvorny.

The report analyses the key trends driving the mobile market in the USA and presents detailed forecasts up to 2010, including the number of subscribers, ARPU, revenue, retail spend and average spend per user (ASPU).