Mobile Phone Revenues To Reach 7.5 Billion By 2003

by Masha Geller, Mar 29, 2001, 12:00 AM

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Jupiter Media Metrix today reports that global advertising, commerce and subscription revenue from mobile phones will reach 7.5 billion dollars by 2003, with North America accounting for just 0.7 billion dollars or less than 10 percent of the total. Asia will lead with approximately 66 percent of the total, or five billion dollars, while Western Europe will represent 1.7 billion dollars. According to Jupiter analysts, nearly all mobile content providers in the U.S. will experience a negative return on investment (ROI) in the near-term because they do not have a direct revenue source such as subscriptions or per-minute revenue sharing in these two markets.

"Despite a growing wireless audience, the U.S. is a revenue wasteland for mobile phone content providers. Although carriers garner revenue for incremental usage of the wireless Internet, they have thus far failed to support a viable revenue model for content providers," said Dylan Brooks, Jupiter analyst. "Mobile content providers must think in terms of long-term investment rather than short-term return on investment, as mobile revenue will remain extremely limited for the foreseeable future."

Key findings and forward looking analysis and advice from the latest Jupiter global wireless research include:

* According to Jupiter's Global Wireless Model, Asia's 136 million mobile surfers will generate $5 billion in revenue by 2003, an average of $37 per active user. According to Jupiter analysts, consumers in Asia will have a longer average tenure on the mobile Web than North Americans or Europeans, which encourages greater usage time, more mobile transactions and familiarity with a wider range of services.

* Jupiter analysts predict that U.S. mobile content providers who do not license or syndicate to carriers will incur tens of millions more in expense than in revenue over the next two years. Many would-be wireless content providers should save their money and develop only a moderate mobile presence through 2003.

* Although Europe is more advanced than the U.S. in terms of wireless penetration and usage of text messaging, Europeans have generally rejected the first versions of WAP or wireless access protocol, which makes it possible to read email, trade stocks or buy movie tickets via a mobile phone. Jupiter analysts expect greater adoption of future WAP versions and upcoming I-Mode services, with advertising, commerce, and subscription revenues growing from just over 100 million dollars this year to nearly eight billion dollars in 2005.

"Asia's dominant share will be driven by Japan's early lead in wireless technology and payment systems," adds Nina Young, Jupiter analyst. "DoCoMo's combination of carrier-based billing and a packet-based network in its I-Mode service have created a seamless and cost-effective user experience, spurring usage activity and revenue streams for the carrier and its content partners."

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