Content gold rush sweeps mobile industry

The volume of traffic carried by mobile operators is set to explode, and the majority of the traffic will be data-orientated within seven years, according to new research. The mobile industry is gearing up for a "gold rush" as operators sign up mobile content providers to offer music, video streaming, messages, enterprise applications and more, ABI Research predicts.

ABI's report noted that securing "heavy duty" content will be key to the future success of mobile operators.

"At the end of the fourth quarter of 2006 there were over 100 million WCDMA [3G] subscribers around the world," said ABI Asia-Pacific research director Jake Saunders.

3G subscribers are providing a much-needed shot in the arm for mobile operators because they deliver average revenue per user (ARPU) that is five to 20 percent greater than current figures.

The period from the second quarter of 2004 to the second quarter of 2006 proved "challenging" for many operators, as competition reduced ARPU and additional revenue streams from non-voice applications failed to compensate, ABI stated.

"Operators are now looking to YouTube Mobile, Jamster and Warner Music for content to excite and entertain consumers," said Saunders.

"Messaging platforms such as RIM's BlackBerry devices and enterprise solutions are driving up data traffic and non-voice revenue contributions."

ABI estimates that non-voice traffic currently represents between 15 and 29 per cent of operator service revenues, depending on the market.

Of this, mobile internet downloads and data now contribute a very respectable three to 17 per cent of total service revenues.

Operators are striving to lock down entertainment content, including not only broadcast network syndicated shows, but user-created material that enables an operator to differentiate itself and reduce churn.