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May 16, 2012

Mobile Revenue will Double by 2016, but Traffic will Increase Tenfold

By Jacqueline Lee, Contributing Writer

According to the Mobile Content and Applications Forecasts Report released by Informa Telecoms & Media (News - Alert), mobile traffic will increase by a factor of ten over the next four years, from 3.89 trillion megabytes to 39.75 trillion megabytes.

Mobile revenue, however, will double, increasing from $325.8 billion to $627.5 billion.

The top three revenue earners in terms of mobile data traffic over the next four years will be Web services, P2P messaging and applications. In spite of consuming over one-third of the bandwidth, though, video streaming is only expected to comprise one percent of mobile revenues.

According to Informa’s predictions, mobile users will consume 6.5 times more video, eight times as much music and social media, and ten times as many games on their mobile devices by 2016.

The number of people who use smartphones and other mobile devices is expected to increase by 23 percent, according to Informa. ABI Research (News - Alert) recently predicted a 29-percent growth in smartphone shipments.

Internet-based messaging via email and text message will also see significant growth. For example, the average number of text messages sent in a month currently totals 31. By 2016, the number is expected to nearly quadruple, to 118.

As Joe Zeto pointed out in a article in February, mobile carriers are in danger of becoming “bit transporters,” while application and content providers as well as device manufacturers command larger shares of mobile services revenue.

Zeto recommends that carriers develop a new pricing model that includes offering tiered services so that those who consume the largest amount of bandwidth actually pay the most for their service. Those tiered services, he said, should be offered for smaller chunks of time, such as when subscribers want to watch the NHL Stanley Cup in HD.

Policy control of this sort will support buyers’ purchases of impulse services.

“This type of end-to-end network flexibility and service quality control can potentially lead to revenue-sharing agreements with third-party content providers and application content vendors,” Zeto pointed out. “Operators can form strong relationships with content providers based on excellent service delivery – barring any government regulation preventing tiered service, such as the United States' ‘net neutrality’ policy.”

Edited by Braden Becker
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