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June 29, 2011

Pyramid: European Operators Must Make Full Use Mobile Social Networks

By Calvin Azuri, TMCnet Contributor

Pyramid Research recently published a new report that revealed that operators must take full advantage of the power of social media to build their business. Stats show that Facebook (News - Alert) user penetration has grown significantly and now reaches almost half the population in some European markets, such as the U.K. and Sweden. Operators will have to learn quickly how to make full use of mobile social networking by using a combination of devices, access and content.

The report, called “The Peril and Promise of Mobile Social Networks for Operators,” offers a great overview and context of social networking on mobile phones and also current information on how fast communications patterns are changing. Pyramid also takes a close look at how social networking is influencing developments on the device.

Mobile social networking continues to experience significant growth as Facebook has close to 700 million global users and over 40 percent of those users – close to 300 million people – access the Facebook website through their mobile devices.

In a release, Pyramid Research analyst Jan ten Sythoff said, "Social networks have provided mobile operators with additional revenues, driving new users to adopt mobile Internet access and existing users to increase their data usage. Non-messaging data revenues are the fastest revenue growth segment for mobile operators, with a 2010-2016 CAGR of almost 15 percent, compared with around 4 percent for messaging and -3 percent for voice. In November 2010, Facebook launched its email service and hopes to become a messaging hub, with all IM, email and SMS conversations in a single place. It also has the potential to become the central contact center, possibly adding voice and video communication. This threatens operators both directly, by impacting their voice and messaging revenues, and indirectly because their brands are overshadowed by social networking brands. Operators therefore need to strike a delicate balance between leveraging the demand for social network mobile access and the threat of social networking cannibalizing their basic suite of services."

The report also has a section on how operators are experimenting with tariffs to attract users and how they are forced to adapt in order to avoid cannibalizing voice and text with data. Pyramid also provides case studies of mobile social networking in France, Netherlands, Spain and the U.K.

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Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.

Edited by John Lahtinen
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