Europe is the petri dish for wireless data. European mobile operators have pledged $116 billion in license fees for zippy, next-generation networks that offer easier access to the wireless Web. Making that investment pay off looks questionable. Even by 2005, voice calls--not Internet services--will account for 60% of European wireless revenues.
Here's the outlook for carriers:
SHIPPING BITS
On today's mobile networks, data charges are per minute, like voice. For 2.5G and 3G systems, charges will be applied per byte. That could boost wireless data access tenfold by 2003.
Who Wins? Carrying data will generate big revenues, but it's a commodity business subject to fierce price pressure. Operators will try to move to higher-margin information services and mobile commerce.
Outlook: Positive
Market Size in 2005: $30.8 billion
Share of Revenues: 22%
R U RDY 2 SPK SMS?
Short messaging--SMS--has yet to catch on in the U. S. But Europeans should zap 200 billion notes this year, yielding $10.6 billion for carriers. By 2003, expect 1 trillion messages.
Who Wins? More messages doesn't mean surging revenues: In five years, competition will cut prices in half. By then, 10% of messages may have ads or paid content. But AOL (AOL
), Microsoft (MSFT
), and others will grab some of the loot.
Outlook: Neutral
Market Size in 2005: $12.3 billion
Share of Revenues: 9%
LOCATION, LOCATION, LOCATION
Mobile networks can pinpoint a caller's location and supply that info to providers of geographically targeted services. This raises privacy concerns, but some users will want instant driving directions or bargains from retailers.
Who Wins? Carriers could make billions. It's an even bigger opportunity for advertisers and content providers. And corporations can do fleet tracking and inventory.
Outlook: Positive
Market Size in 2005: $6.2 billion
Share of Revenues: 5%
LET'S PLAY
From games to online gambling, fun will be big business. Online gamers and gamblers are flocking to mobile phones, and their numbers could surge when color screens and speedier data connections arrive.
Who Wins? Gaming sites and bookies will score most of the dough. But wireless operators should see some increased traffic and will take a small cut of transactions.
Outlook: Neutral
Market Size in 2005: $13.6 billion
Share of Revenues: 2%
BLASTING ADS
Blasting banner ads to cell phones doesn't work: Slow connections and small screens make ads intrusive and hard to read. But color screens and faster data rates with 2.5G and 3G could kickstart ads.
Who Wins? Ad prices are high now--up to $225 per thousand impressions--but should fall by 90% within a few years. Content providers will keep the bulk of the money, with carriers getting about 25%.
Outlook: Neutral
Market Size in 2005: $5.2 billion
Share of Revenues: 1%
E-BUSINESS
Calendars, address books, and e-mail are going mobile. Companies soon will link their job dispatchers, supply-chain tracking, and customers. A better flow of info could cut costs by up to 30%.
Who Wins? Carriers benefit from increased traffic, but software companies like Oracle (ORCL
), SAP (SAP
), and Siebel (SEBL
) will walk off with more than 70% of the business.
Outlook: Neutral
Market Size in 2005: $5.4 billion
Share of Revenues: 1%
SHOP TILL THE LINE DROPS
Spinmeisters envision mobile shopping, price comparisons, and auctions. But don't expect huge sales. Tasks best suited to mobility--say, buying tickets to a movie--will outpace most types of shopping.
Who Wins? Operators are unlikely to control more than half the transactions, which will net only about 3% in commissions or billing fees. Bigger winners will be retailers and e-commerce software makers.
Outlook: Negative
Market Size in 2005: $16.1 billion
Share of Revenues: 1%
DAILY BUGLE ON THE GO
People want traffic alerts, stock quotes, sports scores, and breaking news. WAP services, though, have been tedious. Faster 2.5G and 3G networks should boost demand.
Who Wins? Info-on-the-go will spur some voice and data traffic, but carriers keep only 10% of content revenues. The real winners will be portals like Yahoo! (YHOO
), BT Cellnet's Genie, or Sonera's Zed (SNRA
).
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
