Page 51 - AIB | The Chanel | Issue 2 2011

THE CHANNEL | ISSUE 2 2011 | 51
EMERGING MARKETS | THE CHANNEL
monetising bandwidth may well be
the easier and more profitable play,
unattractive as it looks. Success and
a share of revenues in the rapidly
evolving mobile content ecosystem
in emerging markets will be
determined by the telcos’ ability to
effectively and equitably manage a
broad ecosystem of stakeholders.
End users will remain the key
stakeholder – while affordability
will remain an issue for many, their
aspirations for a simple, easy,
intuitive and personalised mobile
content experience are as strong as
those of their richer peers in mature
economies. Content providers –
another key stakeholder – strive for
a broad platform, fair revenue
sharing and a hassle‑free
experience. Plenty of evidence
supports the idea that mobile
operators’ controlling mentality,
lack of investment and short‑term
focus has been unhelpful in this
regard. Considering the immaturity
of the market, it is not too late for
ambitious mobile operators to
change, but they must move fast.
CLEARMESSAGE
The crux of the issue is the need for
mobile operators to present a clear
message both internally and
externally as to whether their
strategic focus will be to monetise
bandwidth, mobile content or both.
The lack of clarity on this issue was
clear to see when conducting
research for our 'Monetising Mobile
Content in Emerging Markets'
report.
At the other end, a well‑executed
content strategy will require
investment in IT, people and
processes, as well as a change in
mindset amid the rapidly changing
market and competing ecosystems.
Each emerging market mobile
operator must carefully assess
whether it will get a good return on
this investment. The least attractive
option is to muddle through with
poorly funded and poorly executed
tactical initiatives, aiming to do
both access and content, but failing
to do either very well. ■
KEY FINDINGS
The following points emerged as key findings of the 'Monetizing Mobile
Content in Emerging Markets' report. Four key stakeholders remain
locked in a strategic battle in the nascent mobile content market: mobile
operators, device vendors, content providers and platform vendors. Each
is approaching the task of delivering and monetizing the mobile content
experience from different perspectives and with different objectives.
■ Device vendors, independently of operators, distribute the vast majority
of devices in emerging markets. This poses difficulties for mobile
operator content strategies, as mobile operators have little control over
device configuration, and consequently content search, discovery and
personalization. This, along with low customer loyalty, multi-SIM
ownership and consumers’ low prepaid balances, creates a difficult set of
conditions for mobile operators.
■ 3G is a catalyst for change in the mobile content consumption patterns
of users. Operators report that soon after users move to 3G data plans
their consumption patterns shift away from premium content on the
mobile operator portal and towards mobile browsing and free content
and applications. With 3G connections set to grow from a tenth of all
connections in 2010 to a third in 2015, telcos' mobile content plans face
potential disruption.
■ The rapid decline in the cost of devices is allowing users to achieve a
better mobile content and browsing experience.
■ Content providers are not fully satisfied with their experience in the
telco-led mobile content ecosystem. Revenue sharing is one of the
reasons, with some smaller content providers left with as little as a 25%
cut, while larger providers receive up to 50%, and all yearn for the 70%
share that is increasingly the norm in device-vendor app stores in mature
markets. Besides the revenue share issue, many content providers in
emerging markets view the mobile operators’ culture and processes as
inflexible, slow and cumbersome, in what is a very dynamic market.
■ A device-vendor-led ecosystem in the feature-phone segment will
cause disruption for mobile operators in the next 1–2 years. Device
vendors are well positioned to offer a better mobile content experience
than mobile operators by more closely integrating browsers and app
stores. They also appear more inclined to offer a higher revenue share to
content providers. This may make it easier to attract and keep end users
and content providers, two key stakeholders to their mobile content
distribution platforms, especially as neither is particularly enamoured
with mobile operator efforts to date.
■ A third mobile content ecosystem, led by platform vendors, is
emerging, where neither mobile operators nor device vendors control
content aggregation or distribution. These are delivered by players such
as Opera and Google via their proxy-browsing and smartphone platforms,
respectively. ww
w.ovum.com
“
”
A third
mobile
content
ecosystem
led by
platform
vendors is
emerging