Mobile data revenue accounted for almost half of the total mobile revenue globally in 2015 and will grow at an annual rate of 7% to exceed US$600 billion by the end of 2020, according to insight from Pyramid Research.
The company’s latest report states that the rapid rise of data represents a shift from traditional voice and messaging services toward IP-based communications and content delivery. The growing user demand for all kinds of data on-the-go and the advances of over-the-top (OTT) alternatives are exerting tremendous pressure on the mobile network operator (MNO) product and services strategy. The resulting intensified competitive environment coupled with increased demand for IP mobile services is pressing network operators to find new ways to differentiate and engage users in order to monetize their mobile broadband infrastructure investments.
Maritza Morales, Analyst at Pyramid Research, explains: “To compete with OTTs and other ecosystem service providers for broadband traffic, MNOs must develop attractive service, media and messaging platforms that enable customers to consume content and conduct transactions easily and within a budget. Beyond these competitive challenges, monetization strategies must fall within the constraints of net neutrality regulations imposed by national governments.”
Ozgur Aytar, Director of Research at Pyramid Research, adds: “We are seeing an increasing number of MNOs that are leveraging their valuable user data assets to create differentiated customer-centric offers, by focusing on convergence service solutions and by partnering with value-added IP-based communications and content providers. Many converged data connectivity packages we see in the market are driven by data analytics.
“For example, China Mobile uses big data as an input in its product design process and to define the gigabyte thresholds for 4G services plans. Likewise, BT-EE claims that the use of customer insights is the reason their mobile services have the highest user satisfaction ratings of all their products.”
Network operators are also pursuing monetization models built around technological leadership, performance and service convergence. BT is planning a 5G pilot to move toward full convergence of its mobile, fixed and IP platforms and create synergies across its product lines. In the US, AT&T acquired DirecTV in its quest to achieve true service convergence across mobile, video and data solutions. Integration of WiFi as part of the overall network strategy has become widespread among mobile service providers globally, with some positioning WiFi as a core service.
Morales concludes: “Among the emerging WiFi-driven service models, the most potentially disruptive uses WiFi and mobile interchangeably to keep users connected. Backed by the marketing prowess of Google, this new service could revolutionize mobile services configuration.”