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Mobile Content & Services Forecasts 2011-2016

Executive Summary

Gareth Sims, Head of Forecasting Guillermo Escofet, Senior Analyst Jamie Moss, Senior Analyst Shailendra Pandey, Senior Analyst Pamela Clark-Dickson, Senior Analyst

Forecaster
Gareth Sims
Gareth is Head of Forecasting in Informa Telecoms & Medias Industry Research division, leading its centralized forecasting team. He is responsible for the management and development of Informa Telecoms & Medias forecasts covering the mobile, fixed and media industries. Over the last eight years, Gareth has spearheaded the development of numerous forecasting products, spanning a range of sectors from devices and networks through to applications and services. He also manages the forecasts within WCIS, an industryleading market intelligence database whose numbers are quoted extensively throughout the ICT Industry. Gareths most recent work involved building a mobile networkplanning tool to help identify the most cost-effective ways that operators can deploy future networks. He has over 10 years experience in statistical and financial modelling in the ICT industry. Before joining Informa, Gareth worked as a commercial analyst for MCI where he focused on European telecom pricing. Gareth holds a degree in Business Economics in which he specialized in Econometrics.

gareth.sims@informa.com

Author
Guillermo Escofet
Guillermo is a senior analyst and a member of Informa Telecoms & Medias Mobile Content and Applications (MCA) team. He is editor of the MCA channel on the Intelligence Centre and co-editor of fortnightly push service Mobile Media & Messaging. He is responsible for much of Informas topical coverage and analysis of mobile valueadded services. In what is a very rapidly evolving space, Guillermo follows with interest the shifting balance of power between value-chain members operators, traditional mobile content providers and over-the-top players and the changing trends and issues. Guillermo joined Informa eight years ago, initially heading coverage of mobile location, mobile enterprise and mobile messaging services, and subsequently moving to a broader role, covering all mobile VAS services. Prior to Informa, he built up 12 years experience in business and current affairs journalism, both in Europe and Latin America. He was editor of an aviation business title and later worked as a newspaper reporter in Central America and a foreign correspondent in Mexico City. Whilst in Mexico, Guillermo helped with Informas news coverage in Latin America. Guillermo holds a Bachelor of Arts in History and Politics, Warwick University in the UK. guillermo.escofet@informa.com

Author
Jamie Moss
Jamie Moss is a senior analyst, working in the Mobile Content and Applications division of Informa Telecoms & Media. He covers a wide range of topics including the growth and evolution of the market for wireless data services. Recent topics researched by Jamie include the mobile Internet and machine-to-machine (M2M) markets. Jamie has been working as an analyst and consultant to the telecommunications industry since 1999, gaining considerable experience in the deployment of value-added services and nextgeneration infrastructure by wireless operators, as well as in the wholesale bandwidth market for submarine and terrestrial fiberoptic networks. Jamie's day-to-day work has included writing research reports, developing databases of operational benchmarks as well as building front-end analytical tools. He has also provided bespoke consulting expertise to device manufacturers, platform/solution vendors, infrastructure manufacturers and mobile network operators. Jamie holds a BA(Hons) in History from the University of East Anglia in the UK. jamie.moss@informa.com

Author
Shailendra Pandey
Shailendra is a senior analyst in the Mobile Content and Applications division of Informa Telecoms & Media He is responsible for writing executive briefs, comment pieces, and authoring management and strategic reports. His research projects include an in-depth analysis and forecasts on the global mobile advertising market, and a comprehensive study covering mobile VAS in 15 emerging markets. Shailendra has been covering the mobile telecoms sector since 2004. He has been quoted on numerous occasions in both the mainstream and trade press for his opinion and insights and regularly speaks at conferences on mobile VAS topics. He also frequently briefs operators, policy-makers and vendors on mobile industry trends and developments. Shailendra joined Informa in 2008 as a Senior Analyst. Prior to that he worked as a Mobile Industry Analyst at ABI Research, where he produced research, analysis, and forecasts on topics including operator and handset vendor strategy. Shailendra holds an MA in Public Relations &Communications from University of Westminster, London, UK, an MBA from Pune University, India, and a Post Graduate Diploma in Journalism from University of Mumbai, India. shailendra.pandey@informa.com

Author
Pamela Clark-Dickson
Pamela is a senior analyst at Informa Telecoms & Media. Her focus is on mobile messaging and she produces analysis of the messaging market for the Mobile Content and Applications Intelligence Centre. Her areas of expertise cover all aspects of mobile messaging in the consumer, enterprise and marketing industry sectors globally, including SMS, MMS, mobile e-mail, mobile instant messaging and voice SMS. Recently, Pamela co-authored the Informa report, VoIP and IP Messaging: Operator Strategies to Combat the Threat of OTT Players. She has also authored Informas Mobile Messaging 2010 report, and co-authored Informas Mobile Content & Services Report (7th edition) and Mobile Games report. Pamela has covered the telecoms sector for 14 years as an analyst and journalist, and also currently co-edits the Mobile Media & Messaging continuous research service. Previously Pamela edited the Mobile Media and Mobile Games Analyst continuous research services. Pamela holds a BA (Journalism) from the University of Southern Queensland, Australia. pamela.clark-dickson@informa.com

Mobile Content & Services Forecasts 2011-2016: Introduction, methodology and new features

Mobile Content & Services Interactive Forecasting Tool 2011-2016: An introduction


Geography Seven regions 13 countries Countries: US, Canada, Brazil, Japan, South Korea, China, India, Russia, France, Germany, Italy, Spain, UK Services 13 service categories 34 sub-service categories Service categories: messaging, music, games, images, video/TV, gambling, mobile browsing, LBS, social networking, mobile payments/banking, applications, epublications Metrics Users, millions per annum Traffic, millions of events per annum Traffic, millions of MB per annum Revenues, US$ millions per annum ARPU: active users per month, total subscribers per month Average MB per active user

The forecasts include:


End user usage of, and revenues for, non-voice services delivered over cellular networks. End user usage of, and revenues for, portable devices such as tablets. Service revenues for this segment are from data plans only. Total end-user revenues, as well as revenues segmented by operator and third party. End user usage and revenues segmented by Internet applications, such as social networking and video, but only in the case where the subscriber pays a fee on top of basic access. The forecasts do not include: End user usage of, and revenues for, non-voice services delivered over Wi-Fi networks. Mobile advertising, voice-over-IP (VoIP) or machine-to-machine (M2M).

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Mobile Content & Services Interactive Forecasting Tool 2011-2016: Scenarios


Informa uses scenarios to model market uncertainty in terms of downside (threat) and upside (opportunity)
The first step in the methodology was to produce a base-line growth profile for each scenario. The growth profiles were then modified using a weighted index, which was created using the following variables: maturity of service, investment, complexity of service, and the uniqueness of the service or the number of competing services. Informa also analyzed GDP forecasts from the World Bank and the IMF in order to further develop the growth profile for the core scenario, which was then used as the benchmark for conservative and aggressive scenarios.

The three scenarios


Core Conservative Aggressive

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Mobile Content & Services Interactive Forecasting Tool 2011-2016: Scenarios (cont.)
Scenario Core Description
This is the scenario that we believe is the most likely to occur. It has been assumed that the current trends witnessed within markets will continue. More aggressive pricing of data services, the continued proliferation of over-the-top (OTT) players, improved connectivity of cellular networks and more affordable smartphones will all contribute to a significant rise in data revenues and traffic. However, continued growth will not be experienced by all services as economic uncertainty, competition and reduced investment results in declining fortunes for some markets. In this scenario, an economic downturn is more pronounced, Investment in newer services slows as downside risk increases raising the cost of capital. Services currently experiencing high competition from substitutes (e.g., SMS, music and video downloads and ring tones) see a greater loss of market share. The upside opportunities are fewer as the industry receives lower funding to differentiate and grow. Greater confidence in the economic outlook fuels investment in new technologies generating significant consumer demand. Smartphone and mobile Internet costs fall significantly leading to huge increases in both usage and users. Newer services receive the investment needed to reach the mass market as upside opportunities are realized through increased revenue streams. Particular winners are portable/mobile broadband, app stores, streaming and social networking.

Conservative

Aggressive

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Mobile Content & Services Interactive Forecasting Tool 2011-2016: New features
Informas Mobile Content & Services Interactive Forecasting Tool 2011-2016 introduces a range of new features
New tools: Revenue map, service market share

New!

New!

New!

New categories: Total applications, applications stores, e-publications

New content: Interactive infographics

New!

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Forecast methodology: Applications


Informa has introduced an important new service category, Applications, in its 2011-2016 forecasts. It consists of two line items: Application stores
Description
This refers to all mobile applications downloaded from application stores. Specifically, only those downloaded to mobile phones using the mobile phone network. Mobile applications that are downloaded to phones over Wi-Fi are not included. Mobile applications that are downloaded to tablets (over cellular of Wi-Fi) are not included.

New!
Total applications
Description

This refers to any mobile applications that are used on mobile phones - preloaded or sourced from application stores and which communicate with the Internet using the cellular network. Mobile applications that are used over Wi-Fi are not included. Mobile application usage on portable devices such as tablets (over cellular of Wi-Fi) is not included. Methodology Methodology Users: No. of wireless subscribers actively* using mobile application Users: No. of wireless subscribers actively* using mobile stores applications on their phones Events: No. of mobile applications downloaded over cellular. Revenue: App download revenues, plus subscription-based revenues Comprised of the portion of each download-based service category from the other service categories facilitated by apps facilitated by apps stores, plus the download of other apps not Traffic: App download traffic, plus usage traffic from the portion of covered by existing Informa service categories other service categories facilitated by apps, plus traffic generated Revenue: No. of events multiplied by an average price per without user interaction by background applications and widgets application** Traffic: No. of events multiplied by an average size in MB per application*** Notes *Actively equates to a minimum of an average of once per month **Taking into account the number of free vs. paid-for apps and price variation between categories of app, as well as between stores *** Taking into account the variation in size in MB between different categories of app, as well as between stores N.B. Because mobile application events, revenues and traffic figures are partly comprised of a portion of other service categories (e.g., games, music, e-publications, etc.), they are not additive with those service categories, as the same information is being counted in two www.informatandm.com places; for example, a games download made from an applications store will be counted within Informas Games downloads cate gory as 12 Informa UK Limited 2012. All rights reserved well as the Application Stores category. To remedy this, Informa provides additional unique revenue and unique traffic totals

Mobile Content & Services Forecasts 2011-2016: The headline data

Mobile content and apps service revenues revenue maps


Revenue map for 2011
Total End User Revenue
USD 325,879 mn Core Global
Core Global

New!
Revenue map for 2016
Total End User Revenue
USD 627,521 mn

Total: USD 325,879 million.

Total: USD 627,521 million.

Mobile Vs Portable
(85%)

Mobile Vs Portable
(15%)

(87%)

(13%)

Mobile (blue): USD 283,835 million

Portable (red): USD 42,044 million

Mobile (blue): USD 536,425 million

Portable (red): USD 91,095 million

Total Access Vs Total Event Revenue


(51%)

Total Access Vs Total Event Revenue


(49%)

(47%)

(53%)

Access (blue): USD 153,841 million

Events (red): USD 172,038 million

Access (blue): USD 318,724 million

Events (red): USD 308,797 million

Wireless Carrier Vs 3rd Party Revenue


(82%)

Wireless Carrier Vs 3rd Party Revenue


(18%)

(91%)

(9%)

Carrier (blue): USD 295,359 million

3rd Party (red): USD 30,520 million

Carrier (blue): USD 511,454 million

3rd Party (red): USD 116,067 million

Source: Informa Telecoms & Media

Share of third-party revenues to grow from 9% in 2012 to 18% by 2016

Access revenues (subscriptions to data plans) will generate more revenues than event revenues in 2016

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Forecasted growth in end-user service revenues ARPU per user per month (US$)
2011 330 300 270 240
US$ Billions

2016

5.60
5.40 5.20 P2P Messaging

5.00 4.80
4.60

A2P Messaging
P2A Messaging

4.40 4.20
4.00 3.80

210 180 150 120 90 60 30 0

Music
Games

3.60 3.40
3.20

Images Video/TV
Gambling

3.00 2.80
2.60 2.40

2.20 2.00
1.80

Internet
LBS

1.60

Social Networking
Mobile Payments/Banking

Source: Informa Telecoms & Media

1.40
1.20 1.00

Mobile Internet, apps, P2P messaging, and mobile payments/banking services will be the major contributors to revenue growth from 2011-2016 Further, mobile Internet, apps, P2P messaging and mobile payments/banking will also be the four highest ARPU-generating services in 2016
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0.80 0.60
0.40

Applications
E-Publications

0.20 0.00 2011 2012 2013 2014 2015 2016

Source: Informa Telecoms & Media 15

Data traffic growth by services


Traffic (MB bil.)
E-Publications Applications Mobile Payments/Banking Social Networking LBS Internet
Gambling

Video/TV Images Games Music P2A Messaging A2P Messaging


P2P Messaging 0 3000 6000 9000 12000 15000 18000 21000 24000 27000

P2P A2P P2A Messaging Messaging Messaging 2016 2011 448.0 153.2 21.9 5.4 0.1 0.0

Music 1524.7 134.1

Games 2331.1 192.5

Images 3.5 1.1

Video/TV 5986.2 272.1

Gambling 11.8 1.8

Internet 25872.2 2782.4

LBS 127.5 11.1

Mobile Social EPayments/B Applications Networking Publications anking 1510.7 0.3 10379.6 6.9

160.0

0.0

596.6

0.5

Source: Informa Telecoms & Media

Data traffic from mobile Internet, apps and mobile TV/video will see massive growth over the next five years Mobile Internet alone will account for over 65% of total data traffic by 2016

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Service users vs. revenue growth between 2011 and 2016


Revenues Users
87% 88%

The strongest growth in service users is expected to be for mobile funds transfer (international) and e-publications Payments (remote and local), mobile funds transfer (domestic), and mobile apps/app stores are the few service categories likely to see stronger growth in revenues than in users
45%
40%

66%67%
57% 59%

51% 48% 47% 42% 40% 34% 29%


20%

43%42% 37% 31% 32%

38% 32%
23%

27%

34% 31% 31% 30% 29% 29% 25%23% 23% 23% 15%
11% 11% 11% 8% 6%

26%

19%
15%

17%

11%
8%

3%

5%

-4%

Source: Informa Telecoms & Media


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Mobile Content & Services Forecasts 2011-2016: Regional forecasts

Regional summary North America (1)


100% 90% 80% % of wireless subscribers 70% 60% SMS MMS Mobile Internet Full Track Downloads Video Streaming Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking 2011 2012 2013 2014 2015 2016

50%
40% 30% 20% 10% 0%

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile applications, which will grow from being adopted by 33% of the regional wireless subscriber base in 2011, to 77% in 2016.

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Regional summary North America (2)


Messaging Internet Access VAS ARPU

160,000
140,000 120,000 Revenue (US$ mil.) 100,000 80,000

45
40 35 ARPU (US$/ month) 30 25 20

60,000
40,000 20,000 0 2011 2012 2013 2014 2015 2016

15 10 5 0

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$79 billion annually in 2011 to US$150 billion by 2016. Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$23 per month in 2011 to US$39 per month by 2016.
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Regional summary North America (3)


2011 Games Internet Access Messaging Mobile Applications 10 Total traffic (ExaBytes) 8 2012 Year (EB) 2013 2014 2015 2016 12

2011

6
Music Others Social Networking TV and Video 0 0% 10% 20% 30% 40% 50% 60% 70% 80% % of total traffic Source: Informa Telecoms & Media 4 2

2016
Total (EB)

Total end user data traffic transported via cellular within the region is expected to grow from 1.1 ExaBytes annually in 2011 to 9.6 ExaBytes by 2016. The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will more than double, from 5% of all traffic in 2011 to 12% by 2016.
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Regional summary Latin America (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile Internet, which will grow from being adopted by 19% of the regional wireless subscriber base in 2011, to 56% in 2016.

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Regional summary Latin America (2)


Messaging 50,000 45,000 40,000 Revenue (US$ mil.) 35,000 30,000 25,000 20,000 15,000 Internet Access VAS ARPU 8 7 6 ARPU (US$/ month) 5 4 3 2 1 0 2011 2012 2013 2014 2015 2016

10,000
5,000 0

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$23 billion annually in 2011 to US$44 billion by 2016.
Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$4 per month in 2011 to US$7 per month by 2016.
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Regional summary Latin America (3)


2011 Games Internet Access Messaging Mobile Applications 1.5 Music 2.5 Total traffic (ExaBytes) 2.0 2012 Year (EB) 2013 2014 2015 2016 3.0

2011 2016 Total (EB)

Others
Social Networking TV and Video

1.0 0.5 0.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % of total traffic

Source: Informa Telecoms & Media

Total end-user data traffic transported via cellular within the region is expected to grow from 0.3 ExaBytes annually in 2011 to 2.6 ExaBytes by 2016. The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will triple, from 5% of all traffic in 2011 to 15% by 2016.
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Regional summary Asia Pacific (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile banking, which will grow from being adopted by 13% of the regional wireless subscriber base in 2011, to 49% in 2016.

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Regional summary Asia Pacific (2)


Messaging
300,000 250,000 7

Internet Access

VAS

ARPU
9 8

ARPU (US$/ month)

Revenue (US$ mil.)

200,000 150,000

5
4 100,000 50,000 1 0 2011 2012 2013 2014 2015 2016 0 3 2

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$126 billion annually in 2011 to US$250 billion by 2016. Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$5 per month in 2011 to US$8 per month by 2016.
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Regional summary Asia Pacific (3)


2011 Games Internet Access Messaging Mobile Applications Music 2012 Year (EB) 2013 2014 2015 2016 18 16 14 12 10 8 6 4 2 0 0% 10% 20% 30% 40% 50% 60% 70% % of total traffic Source: Informa Telecoms & Media Total traffic (ExaBytes)

2011 2016 Total (EB)

Others
Social Networking TV and Video

Total end-user data traffic transported via cellular within the region is expected to grow from 1.4 ExaBytes annually in 2011 to 16.3 ExaBytes by 2016. The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will almost double, from 8% of all traffic in 2011 to 14% by 2016.
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Regional summary Western Europe (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile applications, which will grow from being adopted by 15% of the regional wireless subscriber base in 2011, to 61% in 2016.

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Regional summary Western Europe (2)


Messaging 120,000 100,000 Revenue (US$ mil.) 80,000 60,000 40,000 20,000 0 2011 2012 2013 2014 2015 2016 Internet Access VAS ARPU 30 25 ARPU (US$/ month) 20 15 10 5 0

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$67 billion annually in 2011 to US$114 billion by 2016. Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$16 per month in 2011 to US$25 per month by 2016.
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Regional summary Western Europe (3)


Year (EB) 2011 Games 7 Internet Access 6 Messaging 5 Mobile Applications 4 Music 3 Others Total traffic (ExaBytes) 2012 2013 2014 2015 2016 8

2011 2016 Total (EB)

2
Social Networking 1 TV and Video 0 0% 10% 20% 30% 40% 50% 60% 70% 80% % of total traffic Source: Informa Telecoms & Media

Total end-user data traffic transported via cellular within the region is expected to grow from 0.9 ExaBytes annually in 2011 to 7.2 ExaBytes by 2016. The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will more than double, from 7% of all traffic in 2011 to 18% by 2016.
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Regional summary Eastern Europe (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile Internet, which will grow from being adopted by 25% of the regional wireless subscriber base in 2011, to 74% in 2016.

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Regional summary Eastern Europe (2)


Messaging 40,000 35,000 Revenue (US$ mil.) 30,000 25,000 Internet Access VAS ARPU 9 8 7 ARPU (US$/ month) 6 5 4 3 2 1 0 2011 2012 2013 Year Source: Informa Telecoms & Media 2014 2015 2016

20,000
15,000 10,000 5,000 0

Total non-voice end-user service revenues for the region are forecast to grow from US$16 billion annually in 2011 to US$35 billion by 2016. Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$4 per month in 2011 to US$8 per month by 2016.
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Regional summary Eastern Europe (3)


2011 Games Internet Access Messaging Mobile Applications Music Others Social Networking TV and Video 0.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % of total traffic Source: Informa Telecoms & Media 3.0 Total traffic (ExaBytes) 2.5 2.0 1.5 1.0 0.5 2012 Year (EB) 2013 2014 2015 2016 3.5

2011 2016 Total (EB)

Total end user data traffic transported via cellular within the region is expected to grow from 0.3 ExaBytes annually in 2011 to 3.1 ExaBytes by 2016. The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will increase fivefold, from 3% of all traffic in 2011 to 16% by 2016.
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Regional summary Africa (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile Internet. It will grow from being adopted by 11% of the regional wireless subscriber base in 2011, to 50% in 2016.

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Regional summary Africa (2)


Messaging 25,000 Internet Access VAS ARPU 4.0 3.5 20,000 Revenue (US$ mil.) 3.0 ARPU (US$/ month) 2.5 2.0

15,000

10,000

1.5 1.0 0.5

5,000

0 2011 2012 2013 2014 2015 2016

0.0

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$7 billion annually in 2011 to US$23 billion by 2016.
Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$1 per month in 2011 to US$3 per month by 2016.
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Regional summary Africa (3)


2011 Games 1.4 2012 Year (EB) 2013 2014 2015 2016 1.6

Internet Access
1.2 Messaging 1.0 Mobile Applications 0.8 Music 0.6 Others 0.4 Social Networking 0.2 TV and Video 0% 20% 40% 60% 80%

Total traffic (ExaBytes)

2011 2016 Total (EB)

0.0 100%

% of total traffic Source: Informa Telecoms & Media

Total end-user data traffic transported via cellular within the region is expected to grow from 0.1 ExaBytes annually in 2011 to 1.5 ExaBytes by 2016.

The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will increase more than five-fold, from 2% of all traffic in 2011 to 12% by 2016.
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Regional summary Middle East (1)


100% 90% 80% % of wireless subscribers 70% 60% Video Streaming 50% 40% 30% 20% 10% 0% 2011 2012 2013 2014 2015 2016 Mobile Broadband Mobile Applications Point of Interest (Location & Maps) Social Networking Mobile Banking SMS MMS Mobile Internet Full Track Downloads

Source: Informa Telecoms & Media

For the displayed service categories, the one that will experience the greatest increase in the number of active users is mobile Internet. It will grow from being adopted by 16% of the regional wireless subscriber base in 2011, to 68% in 2016.

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Regional summary Middle East (2)


Messaging 30,000 25,000 7 ARPU (US$/ month) Revenue (US$ mil.) 20,000 6 5 Internet Access VAS ARPU 9 8

15,000
4 10,000 5,000 1 0 2011 2012 2013 2014 2015 2016 0 3 2

Source: Informa Telecoms & Media

Total non-voice end-user service revenues for the region are forecast to grow from US$9 billion annually in 2011 to US$25 billion by 2016. Average data revenue generated per wireless subscriber (ARPU) within this region is expected to grow from US$3 per month in 2011 to US$8 per month by 2016.
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Regional summary Middle East (3)


2011 2012 Year (EB) 2013 2014 2015 2016 2.5 2.0 1.5 1.0 0.5 0.0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % of total traffic Source: Informa Telecoms & Media

Games
Internet Access Messaging Mobile Applications Music Others Social Networking TV and Video

Total end-user data traffic transported via cellular within the region is expected to grow from 0.2 ExaBytes annually in 2011 to 2.2 ExaBytes by 2016.

The service category that will experience the greatest increase in the percentage of total cellular traffic that it accounts for will be TV and video, which will grow four-fold, from 3% of all traffic in 2011 to 12% by 2016.
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Total traffic (ExaBytes)

2011
2016 Total (EB)

39

Mobile Content & Services Forecasts 2011-2016: Trends analysis

Apps will take largest slice of handset traffic, but only third place in revenues after browsing and SMS
20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2011 2012 2013 2014 2015 2016 100,000 0 2011 Source: Informa Telecoms & Media Other services Applications 200,000

Traffic (millions MB pa)

600,000 500,000

Revenue (US$ millions pa)

400,000
300,000

2012

2013

2014

2015

2016

Applications (including app store downloads and preinstalled/sideloaded apps) make up the largest chunk of global mobile data traffic. From 43% in 2011 to 60% in 2016. Yet their share of revenue is much smaller, rising from just 2% in 2011 to 11% in 2016, moving from seventh to third place.
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41

SMS still ahead of IM in traffic and revenues, but IM is closing the gap on traffic with stronger growth
SMS 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 IM 140 120 100 80

SMS

IM

Revenues (US$ billions pa)

Traffic (events billions pa)

60 40 20 0 2011 2012 2013 2014 2015 2016

Source: Informa Telecoms & Media

Global SMS traffic totaled 5.9 trillion events in 2011, representing 64.1% of total messaging traffic, and will increase to 9.4 trillion by 2016, by which time its share of messaging traffic will fall to 42.1%. Global IM traffic totalled 1.6 trillion events in 2011 (17.1%), but is growing much more quickly than SMS traffic, and will increase to 7.7 trillion events by 2016, representing a 34.6% share of total messaging traffic. However SMS still generates far more revenue than IM, increasing from US$109.1 billion in 2011, to US$127 billion by 2016. By contrast, IM is forecast to generate just US$6.1 billion in 2011, increasing to US$16.2 billion by 2016. P2P SMS generated 30% of mobile operators total content and services revenues in 2011, while P2P IM generated just 2% of total revenues. By 2016, P2P SMS will generate 18% of total C&S revenues, and P2P IM 3%.
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42

Video will hog third of handset traffic, but earn less than 1% of data revenue
0.4%

19.7%

Although monetization options will multiply around new video-on-demand and digital-locker services, most video streaming will continue to be consumed for free. Piracy will also continue to undermine revenue-generating efforts, especially in emerging markets. Operators video and TV offerings will become increasingly irrelevant as overthe-top players take center-stage via smartphone apps. OTT services from movie rentals, to catch-up TV and e-commerce sites will help turn video streaming into a mainstream activity on phones, engaging 35% of mobile users globally by 2016.

Traffic
80.3%

2011

Revenue
99.6%

Mobile video Other services

0.7%

34.3% 65.7%

Traffic

2016

Revenue
99.3%

Source: Informa Telecoms & Media


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43

Operators share of app-led service revenues will increase thanks to growing role of carrier billing
100% 90% 80% 70% 60% 50% 40% Source: Informa Telecoms & Media 30% 20% 10% 0% 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016 2011 2016

Operator share of revenue, by service type

Third parties Operator

Messaging

Music

Games

Images

Video

Gambling Internet

LBS

Social media

Payments/ banking

Apps

E-Pubs

Source: Informa Telecoms & Media

Beyond messaging and Internet access, operators are minority stakeholders in the content and services space.
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Their role as content retailers is in sharp decline and, going forward, it will be increasingly that of invisible enablers.
44

Portable eats up most traffic, but only equals a small revenue slice
4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 15% 85% 2011 2016 350,000 83%

Users (millions pa)

30,000,000 17% 25,000,000 20,000,000

Traffic (millions MB pa)


86%

Portable Mobile browsing

15,000,000 10,000,000 5,000,000 0 90% 10% 2011 14% 2016

500
0

Portable devices (e.g., tablets, netbooks, dongles) will account for the vast majority of Internet traffic carried by mobile networks over the next five years. However, handsets will account for the greatest share of mobile Internet users and revenues.

300,000 250,000 200,000 150,000 100,000 50,000 0

Revenue (US$ millions pa)

29%

27% 73%

71%

Source: Informa Telecoms & Media


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2011

2016

45

Mobile Web growth shoots up in 2012 with smartphones


4,000 3,500 3,000 2,500 2,000 1,500 Smartphones 1,000 500 0 Developed markets Emerging markets Mobile Web 90 80
% of global mobile users

Global users (millions)

70 60 50 40 30

20
10 0 2011 2012 2013

Smartphone penetration
2014 2015 2016

2011

2012

2013

2014

2015

2016

90 80 70
% of global mobile users

By 2016, 39% of global mobile subscribers will be using smartphones (78% in developed markets, 30% in emerging markets).

60 50 40 30

Mobile Web penetration will accelerate over the 20 next four years as smartphones become more 10 0 commonplace, growing from 29% in 2011 to 61% in 2011 2015 globally. Source: Informa Telecoms & Media
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Mobile Web penetration


2012 2013 2014 2015 2016

46

Growth in music streaming will make up for tumbling ring-tone revenues


If it wasnt for music-streaming subscription services, mobile music revenues would show minimal growth over the next few years and start declining by 2016. Informa sees premium streaming services, such as the trailblazing Spotify, in which mobile is a key value-add, as the mobile music markets main engine of growth over the coming years. But it will be an old fashioned callpersonalization service, ring-back tones (RBTs), that will make up the greatest share of revenues in 2016 even though RBT users will remain concentrated in emerging markets, mainly China and India. Currently, RBTs run a close second to ring tones in revenue.
14,000

Mobile music revenues (US$ millions pa)

12,000 10,000 Music streaming 8,000 Full-track downloads 6,000 Ring-back tones Ring tones 4,000 2,000

0 2010

2011

2012

2013

2014

2015

2016

Source: Informa Telecoms & Media

Informa predicts that global mobile-music revenues will grow 27% over the next five years, to US$11.9 billion in 2016. But growth has temporarily halted or gone in reverse in North America and Western Europe, where new sources of mobile-music revenues have yet to build enough momentum to make up for rapidly dwindling ring-tone revenues.
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47

Mobile games are taking an ever bigger slice of the video-game pie on the back of the smartphone revolution
Mobile gaming is a good industry to be in right now. The app-store phenomenon has lifted the lid off mobile games market potential and sparked phenomenal growth in the supply and demand of games in the fastgrowing smartphone and tablet sector. The number of mobile games downloaded has shot up over the past three years, and mobile games are eating into older, more-established video-game formats, such as handheld consoles, which are seeing their revenue and market share shrink. Although the app stores have led to a drastic reduction in game-download prices and have opened the floodgates for free-to-download games, they have also massively expanded alternative monetization options for developers.
30,000

Mobile game revenues (US$ millions pa)

25,000

20,000

15,000

Real-time games

Game downloads
10,000

5,000

Freemium games are now bringing in more than half of mobile-games revenue on the iPhone, from a combination of in-app ads and payments.

0 2011

2012

2013

2014

2015

2016

Source: Informa Telecoms & Media

In-app payments for virtual goods have turned social gaming into a multibillion-dollar industry. Although mobile still poses huge synchronization challenges for Web-based multiplayer games, social gaming is slowly but surely extending to mobile. Leading socialgaming developer Zynga, for example, recently posted better-than-expected revenue growth, thanks in large measure to good sales of its mobile titles.
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48

Outside Japan and China, phones are not where e-readership is focused
Although we are currently living through an ereading revolution, the role played by mobile phones is relatively small. This is a revolution led by e-readers and tablets mainly, the Kindle and the iPad. Beyond Japan and a handful of other northeast Asian countries where mobile novels have become a literary genre in their own right, reading books on phones is a relatively new phenomenon. The snacky nature of content consumption on phones lends itself more to e-papers and e-mags than e-books. Mobile reading does not produce the highdownload volumes typical of e-reader bookworms. With mobile only generating around 10% of ereading revenues in the West, mobile reading revenues are largely concentrated in northeast Asia and Japan in particular.
10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Emerging markets Developed markets

Mobile e-reading revenues (US$ millions pa)

0 2011

2012

2013

2014

2015

2016

Source: Informa Telecoms & Media

Informa estimates that the value of the global market for e-publications delivered to mobile phones via mobile networks was US$1.48 billion in 2011, climbing to US$8.62 billion in 2016. Japan and its immediate neighbors will own around 80% of that market throughout the forecast period.

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49

Japan is the big exception in an otherwise lackluster global mobile images market
Mobile images are the poor relation of the mobile value-added-services family, amounting to little revenue globally unless the avatar- and decomail-led images market of Japan is included.
5,000 4,500 4,000 3,500 3,000

Mobile image revenues (US$ millions pa)

Although the desire for handset-personalization has not waned, the market for premium handset display graphics such as wallpapers and screensavers has.
Revenues derived from this content are still growing in emerging markets, because of growing mobile penetration there, but they are in terminal decline in developed markets. Changing user habits, price erosion, piracy and free ad-funded content have all conspired against premium downloads in the mobile-images space. Paid image downloads are more of a characteristic of the old feature-phone and mobile-contentportal world than the brave new world of smartphones and app stores.

2,500
2,000 1,500 1,000 500 0 2011 2012 2013 2014 2015 2016

Rest of the world Japan

Source: Informa Telecoms & Media

Informa Telecoms & Media estimates that, outside Japan, the global mobile images market was worth US$673 million, rising to US$936 million in 2016. These figures are dwarfed by Japans huge avatar-led mobile images market, which was worth US$2.05 billion in 2011, and forecast to rise to US$3.6 billion in 2016.

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50

Mobile Content & Services Forecasts 2011-2016: Infographics

New!

Mobile content and apps usage in 2011

Source: Informa Telecoms & Media


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52

Mobile content and apps usage in 2016

Source: Informa Telecoms & Media


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