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How to defy the downturn in 2009 with mobile

How to defy the downturn in 2009 with mobile

A wise man once said that “predicting the future is the art of seeing the present logically extended”. As December draws in and the end of 2008 approaches, it’s time again to be thinking about what the New Year will bring.

There’s no doubt that for many things are going to be tough in 2009, especially given the difficult economic crisis we find ourselves in. However, for the mobile messaging industry things may not be quite so bad, here are my top predictions for 2009.

1. Mobile messaging to defy economic downturn

Mobile messaging will continue to grow despite the current downturn in the global economy. As mobile data revenues increase and voice revenues are under pressure, mobile messaging will be seen as the lifeline to the mobile industry, as especially mobile youth regards it as cheap, fast, private, easy and silent. It will fuel the growth in mobile data services and will in turn steer mobile operators, device OEMs and content providers through the tricky times ahead.

Our predictions support recent figures from M:Metrics which state that the number of people using SMS has increased 3.3 per cent year on year across mature markets like the UK, Germany, France, Italy and Spain. This supports recent figures from ABI research which state that revenues from mobile messaging will grow from $127 billion (£84.8bn) in 2008 to $212 billion (£141bn) by 2013.

While these figures are good news for the industry, they also underline the need to ensure that an operator’s underlying infrastructure is efficient and equipped to support the increase in traffic volumes over the years ahead.

2. Less developed regions to fuel peaks in SMS activity

Most new subscribers to mobile services will come from less economically developed and newly industrialised regions, many of whom have a low disposable income. Most of the phones shipped to these markets have little more than voice and text capabilities so the growth potential for SMS in these markets will be significant. According to ABI the number of messaging users will grow with a rate of over 10 per cent per year in countries in Asia, South America and Africa

3. China fuels MMS uptake

The use of MMS will continue to grow especially in China where MMS is booming. Its growth will be helped by ever improving handsets and the demand for user generated content, blogging, social networking and mobile marketing. Juniper Research predicts revenues from MMS to top $16 billion (£10.4bn) in 2009.
However, for this to happen mobile operators must ensure that their infrastructure and marketing is equipped to target MMS. The application-to-person MMS traffic in China makes up for 70 per cent of all MMS traffic (source: ZTE).

4. Personalisation comes of age

In the Western world, we expect much of the growth in mobile messaging to come from personalised services, as in the Fast Moving Consumer Good market that telecoms has become, differentiating on user experience is key.

Customers will demand more from their operators in terms of ease of use, convenience, status, fashion, security, safety, privacy and control, so differentiating the services an operator can offer through added features such as productivity and security-based SMS applications, like out-of-office, auto-forward, storage/back-up capabilities and messaging firewalls will be key to not only enhancing the mobile experience but also increasing messaging ARPU and offsetting generic price decline on SMS and MMS.

5. Mobile marketing and advertising surges ahead

Operators will also continue to generate revenues through mobile marketing and advertising – a development which in 2009 will see the introduction of location based mobile advertising. The key to success will be to incorporate a multimedia and multi-platform approach to ensure that it becomes a natural and valuable extension of the consumer. The new business model that this enables will help consumers keep up their SMS habits in economically challenging times by opting for advertisement-funded discounts.

6. Mobile internet overtakes PC based internet use

The use of the mobile internet will increase significantly by the end of 2009. According to IBM more than 50 per cent of consumers would substitute their PC based internet connection for their mobile. As the majority of new phones come with internet access as standard we predict that more people will access the internet from their mobile than their PC by the end of 2009.

According to T-Mobile Germany, browsing on iPhones was 30 times more than on other handsets, and at Vodafone Germany 45 per cent of data ARPU already is mobile internet, due to partnerships with Google, YouTube and MySpace and using widgets.

7. Focus on mobile security increases as mobile commerce comes of age

As mobile phones increase in sophistication (especially smartphones), the value of the data they carry will mean greater attention will be paid to mobile security. Subscribers will expect mobile operators to take greater security measures to protect their personal data such as social security numbers, PIN codes, passwords, company financial data and other proprietary data – a fact which will become more important as mobile commerce takes off.

At the moment buying travel tickets and basic consumables via the mobile internet has been popular in Japan and Korea but the trend is moving to Europe and the US. An independent survey commissioned by Airwide Solutions found that 5.6 million people in the EU already access financial information from their mobile phones - a 23.6 per cent jump from the same time last year.  Although this is encouraging for the mobile industry, consumers must be aware of potentially dangerous fraudulent scams such as phishing.

8. The digital youth drives changes in communication

The rise of social networks will continue and this will impact upon mobile messaging traffic as more and more people use their mobile phones to update their profiles remotely and blog on the move. It will be interesting to see what the behaviour of the digital youth will lead to as they have proven that they prefer social networking, blogging and text messaging over voice. Will this lead to the end of the voicemail as we know it? According to Nielsen Mobile, the 13-17 age group in the US sends around 1800 SMS per month, that is 60 SMS per day.

9. Mobiles go green

As more emphasis is placed on environmentally friendly technologies, will greater attention be paid to handset recycling initiatives? With only one per cent of mobile handsets recycled globally each year, 65 to 85 per cent could be re-used. However, for this to be successful mobile operators must have comprehensive EIR systems in place to ensure that all mobile equipment is tracked and logged and any invalid handsets blocked from operating on mobile networks.

Will I be right or wrong? Only time will tell.

However, while it is very difficult to predict what the future holds, it benefits mobile operators to prepare by ensuring that their infrastructure is flexible and scalable. By breaking down traditional messaging infrastructure silos into separate, scalable tiers, operators can respond to market conditions and launch new services as and when they need to, to meet customer demand.

They can take advantage of all the revenue benefits of rolling out new messaging types while mitigating the risk of building a dedicated infrastructure for an unproven messaging type. Many operators are already taking these steps and will find that they have transformed their legacy infrastructure into a future proof one that is prepared for the future.

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