Mobile operator revenues decline. And data use surges

The recent Ofcom report into UK mobile usage and operators has been widely reported online. There are a few interesting headline figures that come out of it. One of the most significant for me are the data and revenue figures. Firstly, operator revenues declined by 3.5% over the last year. Blame it on the recession? Perhaps. But I have said for a while that revenue-wise the operators are stuck in a rutt. We all have the mobile plans that we want and generally don’t want to pay any more. At the same time, additional revenue generators such as voice, SMS and now data roaming fees have been restricted through EU legislation. So, in a saturated UK market, where can mobile operators gain additional revenue? Content? Well not really because that has now been sown up by the likes of Apple and itunes. Mobile marketing and advertising? Again, unlikely with iAD and Google’s Admob getting in on the act. So from the UK perspective there is little opportunity for mobile operators to increase their revenues.

On the flip side, data has increased massively. In short, everyone is busily updating their Facebook pages from their mobile phones. According to the Ofcom report though, revenues have far from kept pace. Take a look at their chart below:

It is important to take these kinds of stats with a pinch of salt. They make it clear that it does not include data revenues already bundled into tariffs: that’s iphone and Blackberry users in particular. However, the bundling aspect is significant. The fact that it cannot be separated means that the data revenue options are limited for the operators. In short, users of smartphones expect their data as part of their subscription.

I have said a few times before, it is all very well talking apps and HTML5, but the big issue that will have to be addressed is data. There is little incentive for operators to invest in better data networks if there is no chance of increasing revenues. I suspect that in the short term, at least, the solution will be to limit data use. That’s something that some operators have already implemented.

One thought on “Mobile operator revenues decline. And data use surges

  1. Pingback: How fast is mobile broadband in reality? « The future of mobile and mobile marketing

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