Press release: Margins to plummet as mobile services compete with fixed
June 2007 – The widespread introduction of low-cost bundled data tariffs and new
access networks could lead to dramatic decreases in the price per megabyte of
mobile data, and operators might lose control of the services that they carry,
according to the report, The Future of the Global Wireless Industry: scenarios
for 2007–12, produced by Sound Partners Limited.
“There is increasing uncertainty over the future of the wireless industry, and
it could evolve in radically different ways,” says co-author Dr Mark Heath.
“Organisations need to generate robust plans to steer the industry in their
preferred direction, and to ensure success regardless of how the market
develops.”
Sound Partners has defined three plausible scenarios for the evolution of the
wireless industry during the next five years: ‘Lowcost Data Pipes,’ ‘Emerging
Markets Thrive’ and ‘Cellular Goes Indoors.’ In the ‘Lowcost Data Pipes’
scenario, wireless data becomes a commodity as a result of the widespread
introduction of low-cost, unlimited-usage mobile data packages and the
deployment of WiMAX networks. Mobile networks become transparent data pipes, in
much the same way as fixed networks, and mobile operators lose control of (and
the revenue from) the services that are carried across their networks. Mobile
operators have to focus on reducing cellular network costs substantially so that
they can deliver high volumes of data traffic profitably.
“We are already seeing early signs of this scenario,” says Dr Alastair Brydon,
co-author of the report. “The number of relatively inexpensive, uncapped-usage
data tariffs from mobile operators is increasing. For example, T-Mobile UK’s
web‘n’walk Plus service offers 3GB of Internet access for only GBP29 (USD55) per
month, which equates to USD0.02 revenue per megabyte. Furthermore, some
operators are allowing unlimited Skype voice calling, which enables mobile users
to bypass conventional mobile operator voice services.”
This new report examines a number of key trends within the wireless industry and
assesses their potential effects by defining and evaluating three plausible
scenarios for the industry’s evolution. The report identifies actions for mobile
operators, and handset and infrastructure vendors.