unite magazine - September 2007

Sharp start this year for data revenues

Advanced data services are the big hope for rising revenues. Is the reality matching the promise? Recently released figures and analysis indicate it certainly is.

As summer vacations draw to a close and we enter the last few months of 2007, now is a good time to take a look at the state of the communications industry. It’s an upbeat snapshot with strong growth in advanced data services and good performances being reported by many service providers.

Voice over IP (VoIP) has to be one of the most hyped services recently and it is living up to expectations. Infonetics Research reports that global VoIP services hit 66% growth last year, generating nearly USD 16bn revenue. The forecast is even brighter with revenues predicted to triple next year.

Video and music services mushroom

It’s a similar picture for IPTV with a 178% growth rate in 2006, and online video with daily usage rising by 56% over last year, reports US media house Magid Media Futures. Interestingly, users are watching a wider spread of content, even full-length films.

Meanwhile fixed Internet and mobile phone music downloads continue to rise at the expense of traditional CD sales which fell by 5% in 2006. The music industry association, Federation of the Phonographic Industry (IFPI), predicts that digital sales of music could grow by 50% in 2007.

Data is up for service providers

With PricewaterhouseCoopers forecasting double-digit growth for digital and mobile spending over the next five years, rising to USD 153bn by 2011, it seems that service providers are enjoying their share of the boom. Telstra in Australia claims a 92.4% rise in non-SMS data revenue, while Telecom Italia is reported to have seen a jump in the contribution of non-SMS services to its total mobile data revenues, up from 38.7% in early 2006, to 42.1% in first quarter 2007. In the US, AT&T announced an increase in its second quarter 2007 data revenues of nearly 67% year-on-year.

The analysts are forecasting a rosy future. Pyramid Research says that mobile data revenue in Asia will triple over the next five years to USD 110bn.

The market conditions are right

So why are we seeing these results now? Social networking is strengthening as a driver of revenue. User-generated content sites such as YouTube continue to create new business opportunities as the influence of communities grows. Social networking, dating and personal content delivery services are expected to expand ten-fold between now and 2012, to USD 5.7bn, says Juniper Research.

Music is another key driver. Online sales are booming, gifting service providers with a great opportunity to capitalize on music providers’ need for efficient delivery channels with a good user experience. The same applies to other multimedia content such as video and TV.

The industry is also becoming more adept at launching services that are right from day one, delivering real value for users, who in turn want more. All the pieces are coming together.

An important role to play

Helping service providers take full advantage of these market conditions underpins all Nokia Siemens Networks activities. Our aim is to support you in creating, launching and marketing services, as well as providing the infrastructure solutions that bring high-quality end-user experiences and fast time to market.

It’s been an exciting 2007 for us too. With our launch in April we became the leader of mobile networks with a 27% market share at the end of 2007 (Informa Telecoms & Media figures). The support we provide is strengthened by our position as a leading supplier of fixed networks and our close ties with Nokia, the world leader in mobile devices.

All of which means we can help service providers with essential insights into market and end user behaviour, as well as solutions that are truly end-to-end, to help you achieve your individual goals.

We look forward to continuing to help the industry make 2007 a vintage year in the history of communications.