2006 is forecast to be a watershed year for the mobile industry, as the structure of mobile markets and the strategies of operators begin to change in response to a number of major threats.
According to research group Informa Telecoms & Media's annual Mobile Industry Outlook 2006 report, the unsustainability of the traditional mobile operator business model will become more apparent in the coming year.
High subscriber acquisition costs driven by handset subsidies, as well as high churn levels and a decline in the price per minute of mobile voice telephony, will place pressure on operators in 2006.
Indeed, 60 per cent of operator respondents to the survey expect subsidies to decrease or remain the same in 2006, while 84 per cent expect the price of voice services to drop by up to a quarter and 49 per cent expect churn to increase.
During 2005, mobile operators have experienced mounting frustration with their inability to derive meaningful revenue streams from mobile content services, with many now starting to come to the view that off-portal strategies, where revenues are derived principally from traffic and billing services, may be a more lucrative approach.
The survey found that mobile music and email are the services which mobile operators expect to generate most interest in 2006, followed by games and mobile TV.
Convergence will also appear as a more tangible threat over the next year, as will the impact of IP, and in particular VoIP, which is rapidly driving down the price of voice telephony and set to become a major concern for mobile operators in 2006.
Informa predicts that VoIP will take its first major bite out of the mobile voice cash cow next year, although only 30 per cent of mobile operator respondents see VoIP as a threat.
Overall, however, the report highlights a growing optimism within the mobile sector. Some 68 per cent of survey respondents are more confident about the industry's prospects in 2006 than they were last year.
"2006 will be a watershed year for change. Operators will increasingly look to cut costs through the use of IP, outsourcing parts (or all) of the network, and by reining in handset subsidies," the report said.
"At the same time they must continue to look for new revenue streams. More coherent wholesale strategies and innovative pricing schemes designed to take more traffic away from the fixed network could ultimately provide greater rewards."
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