More Subscriptions Than Subscribers
Informa calculates that users of mobile services number fewer than 2.3 billion, even as total mobile subscriptions have reached three billion worldwide. Subscription growth is being driven by the expansion of networks in developing markets but also by more and more people choosing to take out a second or third mobile phone subscription. According to Informa’s forecasts, users of mobile services will not reach three billion until the end of 2009, by which time subscriptions are forecast to reach four billion.
A report published by Informa Telecoms & Media, “Multiple SIMs: Quantifying the Phenomenon Taking Mobile Penetration Beyond 100 Percent,” found there were approximately 1.32 subscriptions to every mobile subscriber worldwide at the end of 2006 — i.e. approximately one in four subscriptions is someone’s secondary or tertiary subscription.
The number of multiple-SIM users is expected to continue to rise as operators seek to extract incremental revenues from customers by offering second SIMs for cheaper call rates, particular data services, roaming etc. As revenue is spread across more subscriptions and as mobile telephony is extended to more and more people on low incomes in developing markets, revenue per user is continuing to fall. Expansion of the subscription base continues to offer potential for overall revenue growth, however, even as the price per minute for traditional mobile voice services declines.
Accessories Earn More Revenue
The market for mobile phone accessories will generate over $32 billion in revenues in 2007, more than the $28 billion expected from the Smartphone market. Around 77 percent of these revenues will come from the sales of “after-market” mobile phone accessories and the remaining from “in-box” accessories shipments.
According to ABI Research industry analyst Shailendra Pandey, “The number of mobile phone accessory products is expanding with new products driven by technology as well as by customer fashion and personalization needs appearing in the market. Handset vendors and mobile operators are showing greater interest as accessories provide high margins and also opportunities to promote their brand and expand their product offerings. The growing interest among mobile operators is also driven by the realization that mobile phone accessories can lead to higher average revenue per user.”
Handset vendors now recognize that to increase sales of their high-end mobile phones and smartphones, they need to provide accessories that allow users to fully enjoy and benefit from the features provided in those handsets. Nokia is addressing the handset accessory market with a distinctive approach of “Mobile Enhancement” products while Motorola is placing special emphasis on the growing “Personalization” and “Self-Expression” trends.
Consumers Don’t Make Music Phones Sing
Although US consumers are continuing to acquire music-capable mobile phones, few take advantage of those capabilities. According to a new report from Jupiter Research, “Mobile Music: Target Impulse Purchases and Purchasers for Over-the-Air Downloads,” only about five percent of consumers report sideloading songs onto their phone (i.e. transferring digital songs from a PC to a phone), and only two percent report downloading songs over the air. Thus, although some 27.9 million US consumers are expected to have music phones by the end of this year, the music functionality of the phone will remain significantly underutilized.
Carriers potentially face significant hurdles including resistance to initially high price points for over the air downloads, prevalence of existing portable devices and compromises in device functionality to combine phone and music capabilities. Even Apple’s new iPhone will probably not serve as the catalyst for mass adoption of music phone capabilities.
“While the iPhone could raise consumer awareness of, and interest in, music phones from other manufacturers and mobile operators, it is more likely to attract a unique market segment, hard for competitors to emulate,” said Joe Laszlo, research director at JupiterResearch. “Apple fans and status seekers will rush out for a first generation iPhone; music fans will probably wait a while.”
To drive usage, as opposed to simply ownership, of music phones, carriers, handset makers and the music industry must do more to make the case that music capabilities integrated into handsets deliver real consumer benefits. Reaching out to the 20 percent of consumers who buy music impulsively, and integrating features like mobile fan communities and song identifiers will be key to prompting consumers to try, and eventually buy, music on their mobile phones.
Alcatel-Lucent Network in Libya
Alcatel-Lucent has signed a contract with Libyan Post Telecommunications & Information Technology Company (LPTIC) to supply a nationwide fiber-optic backbone network that will serve all of Libya. This contract, valued at more than 90 million euros, is a major step forward for the Libyan telecommunications industry. Under the terms of this contract, Alcatel-Lucent will deploy a fiber-optic network linking all major cities in Libya with more than 4,400 km of infrastructure and will serve as the backbone network for Libya’s telecommunication infrastructure.
“This contract, which represents Alcatel-Lucent’s largest agreement in Libya, is a major step forward for the Libyan telecom industry to offer next-generation services to their customer base,” said Olivier Picard, president of Alcatel-Lucent’s Europe and South activities. “It demonstrates our commitment to assist in the development of the Libyan infrastructure and more generally the company’s role in helping the people throughout the African continent be able to benefit from the advantages of a modern and powerful information infrastructure.”
