Users tune into mobile entertainment

The biggest drivers of mobile revenue growth will be entertainment and messaging

Non-voice services, predominately entertainment, will account for an average 13.3 per cent of total service revenues for US mobile operators in 2006, growing to 24.5 per cent by 2011, new research has predicted.

According to the US Mobile Market: trends and forecasts 2006-11 report from Analysys, the biggest drivers of this growth will be entertainment services and messaging.

US mobile operator revenues from mobile entertainment services are expected to total $5.2bn in 2006, growing to over $7bn in 2007.

"The market will be spurred by the increasing adoption of 3G handsets and by service innovation, stimulated in part by new-entrant mobile virtual network operators," said Danny Dicks, principal analyst and co-author of the report.

"In addition, recent spectrum auctions in the US have given operators the spectrum they need to increase the coverage and capacity of CDMA2000 1 x EV-DO and HSDPA-enabled WCDMA networks."

Senior analyst Alex Zadvorny, the report's co-author, added: "Mobile data services gained prominence significantly later in the US than in other developed markets, such as Japan and Western Europe.

"However, they are catching up quickly. Unlike in Europe, entertainment services, and not person-to-person messaging, are the key revenue generators.

"We expect most entertainment services to be delivered over cellular networks, with broadcast TV ultimately making only an incremental contribution to overall revenue."

Analysys also predicts continued rapid increases in most person-to-person messaging services for the next five years, with mobile email and instant messaging growing particularly fast.

"In revenue terms, SMS will continue to be the most important messaging service but email and IM will catch up, particularly as operators continue to price bundles in a way that does not drive subscribers to choose one particular form of message over another," said Zadvorny.

"We estimate that text messaging in 2006 will account for less than 50 per cent of all revenue from person-to-person messaging."