2008 Australia - Mobile Data and Content - The Wireless Broadband Explosion

Publication Date	August 2008
Publisher	BuddeComm
Product Type	Report
Pages	140
ISBN Number	not applicable
Product Code	BUD00294

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Summary

Market shift from voice to data

Mobile data traffic is soaring. This is due to the capped mobile data services now on offer in the market by Optus (Virgin Mobile), Vodafone and Hutchison '3'. By far the largest growth market will be in mobile email. With the benefit of uncapped prices customers will check their web mail more frequently and this will begin to effect SMS usage. Slowly but surely prices are coming down and opening up new mass markets.

In 2009 mobile broadband revenues could start to challenge SMS revenues and could reach the $1.5 billion threshold (this includes the hardware such as data cards, etc). Within this figure, we do include mobile media services such as ringtones, music, games, etc. The value of that segment has been growing very slowly over the last decade and within a year, the operators are already generating more revenue from basic mobile wireless access than they are from their mobile media portals.

Currently this is predominately complementary revenue for the mobile operators; however it is expected that over time this will balance out when the mass market starts to kick in. By that time this revenue will change from complimentary to substitution. Also broadband is less developed in Australia than in other developed countries. Thus there is a relatively better business case for mobile broadband in Australia than in other countries.

However, wireless mobile is still a very small proportion of this mobile data. BuddeComm estimated that in 2008 this was around 5% of this market. We also remain sceptical about predictions that wireless broadband could take over from fixed broadband over the next one to two years. Although prices have fallen over the last two years, this service still remains too expensive for the majority of the residential market. It certainly is taking off amongst the business market and the top-end of the residential market, particularly among professional people.

Also, it won't be until IP-based Next Generation Mobile, based on more spectrum, becomes available, before we start seeing the development of mass market wireless broadband. While some relief is expected when Long-term evolution technologies become available, 4G which would have the bandwidth and the IP efficiencies is not expected until 2012-2015.

'Off deck' models developing

Portals are rapidly proving to be a far too crude tool to play any role of significance in the rapidly emerging digital media market. Instead there is room for what we call value added infrastructure services, facilities and tools that allow customers to better manage their emails and transactions, as well as the management of other interactive services that are increasingly going to take place over the mobile networks.

Rather than operating their own portals, mobile content will move 'off deck' and the mobile operators will offer mobile payment facilities. They have a unique infrastructure in place that allows for micro payments, through Premium SMS, which is a key element that is still missing in the digital economy.
In the end, structural changes will also be needed in the mobile industry in order to engage true content providers and media companies to independently offer their services over open mobile networks.

Value-added markets

Activity in the mobile value-added market is kept artificially low because of the high charges that apply for such services. At this point in time, there is not sufficient spectrum available to allow for a more mass market development. Furthermore the current technologies are not optimised for data. End-to-end IP based technologies are required for that.

What this means is that for the time being the mobile data services will revenue wise stay rather static. Also portal based services will decline as customers will move more and more towards off deck services.

Business models for content providers remain shaky, with operators still charging a hefty 30-50% of revenues.
Key highlights:

BuddeComm remains puzzled and bewildered about the hype surrounding the iPhone, although it is currently no mass market product, nor is it likely to be in the foreseeable future. However, what Apple is teaching the industry, is that more marketing is needed to get this market moving.
The question remains as to whether HSDPA will ever reach its true mass market potential, or will LTE and later on 4G take that position in 2010-2012 and beyond. A rapid deployment of low cost data access packages will propel HSDPA right in front the debate. HSUPA+ and LTE have already started to arrive on the horizon.
The mobile radio market is set to boom. Motorola is making good progress with the rollout of its Zeon Digital based network in NSW, Queensland and Victoria, which is based on the TETRA standard.
Telstra's Next G network is certainly one of the global mobile success stories. Not only has its rapid rollout been incredible, but also the way that it has serviced the market has been very successful.
The new market of broadband 'mobility' will further develop in an all-IP network infrastructure, linked to fixed and mobile personal devices, with high storage capacity and parallel processing. Data will move freely around this wireless grid, which of course, will also be linked into the fixed network.
A big growth market for mobile broadband will be IP Telemetry. One of the reasons for the request for more spectrum is the rapid growth in wireless machine-to-machine communications. This is seen as the fastest growing industry over the next decade. It is also fuelling the IPV6 debate as all these billions of devices will need an IP address. It is expected that WiMAX will play a significant role in this market.
There has been an enormous amount of hype about mobile TV but the reality is that very few people are prepared to pay the prices that the operators are charging for the service. The current technology, and more importantly its business models, don't yet stack up.
As we have been predicting for some time, the PSMS market has begun to falter. The high cost of access has been a constant limiting factor for their further development. With capped mobile data prices we see a very rapid changeover from PSMS to off-deck services.
Key companies in the mobile advertising market are Blue Freeway, destra, Hyro, belong, Photon and Premium TV.

Data in this report is the latest available at the time of preparation and may not be for the current year.

Content

1. The Market in 2008
- 1.1 Telstra is taking the mobile lead
- 1.2 Mobile broadband
- 1.3 Next Generation Mobile (NGM)
- 1.4 Mobile content
- 1.5 The end of mobile portals
- 1.6 Off deck services
- 1.7 IP telemetry
- 1.8 The handset market
- 1.9 Nokia music store analysis
- 1.10 The Apple iPhone
2. Forecasts and Market Issues
- 2.1 2008 year of mobile data
- 2.2 Issues, key trends and developments
  - 2.2.1 Mobile data usage trends
  - 2.2.2 Premium network, premium prices
  - 2.2.3 Crazy Johns tsell mobile data
  - 2.2.4 4G developments
  - 2.2.5 Mobile value-added market stifled by high charges
- 2.3 Market analyses
  - 2.3.1 Limitations of HSDPA
  - 2.3.2 Will WiMAX deliver?
  - 2.3.3 Smart wireless devices
- 2.4 Future developments
  - 2.4.1 Service evolution
  - 2.4.2 How tmove forward?
- 2.5 Mobile TV
- 2.6 Market forecasts
  - 2.6.1 The blurred statistics of mobile data
  - 2.6.2 Unique business opportunities
3. HSDPA
- 3.1 4G LTE and 3G HSPA at 42Mb/s
- 3.2 HSPA, HSDPA, HSUPA
- 3.3 Australias start with HSDPA
  - 3.3.1 3G HSDPA steaming ahead
- 3.4 HSDPA developments
  - 3.4.1 Telstra
  - 3.4.2 Hutchison
  - 3.4.3 Vodafone
  - 3.4.4 Optus
  - 3.4.5 Ericssons broadband activities using HSPA
  - 3.4.6 Neutral broadband connections for HSDPA
  - 3.4.7 HSPA threat tSMS analysis
  - 3.4.8 Vendor war HSPA versus WiMAX analysis
- 3.5 Study reveals positive impact by Next G
- 3.6 Will HSPA break through intthe broadband market?
4. SMS Stats and Forecasts
- 4.1 Statistical overviews
  - 4.1.1 Mobile revenue
  - 4.1.2 SMS usage
- 4.2 Market trends
  - 4.2.1 SMS betting
  - 4.2.2 SMS spam regulation
  - 4.2.3 SMS service for people with disabilities
  - 4.2.4 The youth market
  - 4.2.5 SMS advertising
- 4.3 SMS services
  - 4.3.1 Premium Rate SMS
  - 4.3.2 Business SMS
  - 4.3.3 Skype SMS
  - 4.3.4 Australia mobile data MMS
5. Mobile TV
- 5.1 The market in 2007
- 5.2 Market analysis
  - 5.2.1 The end of mobile TV
- 5.3 Major players
  - 5.3.1 Hutchisons 3
  - 5.3.2 Vodafone
  - 5.3.3 BigPond mobile TV
  - 5.3.4 Optus
  - 5.3.5 Device driven developments
  - 5.3.6 Industry under pressure
- 5.4 Spectrum for mobile broadcasting
  - 5.4.1 TV Channels A and B for digital services
- 5.5 Multimedia Broadcast Multicast Service (MBMS)
- 5.6 Key market 13-19 year olds
- 5.7 Digital VideBroadcasting-Handheld (DVB-H)
  - 5.7.1 Overview
  - 5.7.2 DVB-H trials
- 5.8 Telstra pulls out of movemedia trial
- 5.9 Analysis of video-based mobile developments
  - 5.9.1 Mobile TV are you serious?
  - 5.9.2 The future indeed is videcommunications
  - 5.9.3 Mobile videhas been over-hyped
  - 5.9.4 Financial and technical limitations
  - 5.9.5 Competing technologies
  - 5.9.6 Regulation-driven competition
  - 5.9.7 Checking market realities
- 5.10 Mobile TV and WiMAX could be a good match analysis
6. M-Commerce
- 6.1 From m-marketing tm-payments
  - 6.1.1 Mobile payments
- 6.2 Mobile banking
- 6.3 Mobile marketing
  - 6.3.1 Residential applications based on permission-based marketing
- 6.4 Mobile advertising
- 6.5 Mobile media
- 6.6 M-commerce developments and forecasts
  - 6.6.1 Wireless broadband
  - 6.6.2 Business applications
  - 6.6.3 SMS driven m-commerce an early contender
- 6.7 Other developments
  - 6.7.1 Barcode readers on mobile phones
7. Telemetry, Location Services, RFID
- 7.1 The Internet of Things
- 7.2 Machine-to-machine transmission
- 7.3 Telemetry
- 7.4 RadiFrequency Identification (RFID)
  - 7.4.1 RFID a business revolution
  - 7.4.2 Rapidly maturing technology
  - 7.4.3 Developments in Australia
  - 7.4.4 RFID experimental licences
  - 7.4.5 Industry association
- 7.5 Telemetry statistics (traditional market)
  - 7.5.1 Utilities telemetering
  - 7.5.2 Mobile-based telemetry
- 7.6 Location-based services (LBS)
  - 7.6.1 Mobile origin location indicator and emergency
  - 7.6.2 Developments in the USA
  - 7.6.3 Developments in Australia
  - 7.6.4 Seeker Wireless Pty Ltd
  - 7.6.5 Intelligent Transport Systems (ITS)
  - 7.6.6 Cell broadcasting trial from Seven Network 1998
  - 7.6.7 Vodafones My Vodafone service
  - 7.6.8 Location and navigation from Sensis
  - 7.6.9 Mobile Location Manager from Telstra
  - 7.6.10 Optus ZoFindA
- 7.7 Car navigation systems
  - 7.7.1 Early results
  - 7.7.2 Market gathered pace in 2007
  - 7.7.3 Analysis
8. Mobile RadiMarket
- 8.1 Boom has sfar not occurred
- 8.2 Recent developments
  - 8.2.1 Telstra Vehicle Access Network (VAN)
  - 8.2.2 Motorolas dual-mode MOTOTRBO radisystem
  - 8.2.3 Zeon Digital Network
  - 8.2.4 The collapse of Simoco
- 8.3 Market statistics
- 8.4 The slow road from PMR and TMR tDMR
  - 8.4.1 Introduction
  - 8.4.2 Trunked Mobile Radi(TMR)
  - 8.4.3 Public Mobile Radi(PMR)
  - 8.4.4 Spectrum licensing
- 8.5 The key standards
  - 8.5.1 APCO-25
  - 8.5.2 Terrestrial Trunked Radi(TETRA)
- 8.6 Major service providers
  - 8.6.1 ComGroup Australia
- 8.7 Emergency services organisations networks
  - 8.7.1 New South Wales
  - 8.7.2 South Australia
  - 8.7.3 Western Australia
  - 8.7.4 Queensland
  - 8.7.5 Tasmania
  - 8.7.6 Victoria
9. Wireless Mobility Market Overview
- 9.1 Mobile market
- 9.2 Mobility applications
- 9.3 The move towards 4G
- 9.4 Personal wireless broadband market analysis 2008
  - 9.4.1 Business models more important than technologies
  - 9.4.2 Competition needed tchange the mobile model
  - 9.4.3 Will WiMAX deliver?
  - 9.4.4 Not being seen tbe bored
  - 9.4.5 Smart wireless devices
- 9.5 Mobile spectrum developments
  - 9.5.1 Allocation of new spectrum
- 9.6 Mobility devices
  - 9.6.1 The communications market of tomorrow
  - 9.6.2 Moores Law: storage, access, processing
  - 9.6.3 Bringing the future back home
- 9.7 Bluetooth
  - 9.7.1 Overview
  - 9.7.2 The technology has found its place
  - 9.7.3 bluepulse
- 9.8 802.16e from Unwired
- 9.9 Ultra Wideband (UWB)
  - 9.9.1 Developments in Australia
  - 9.9.2 Regulatory issues
10. Mobile Media
- 10.1 Mobile media opportunities
  - 10.1.1 The most personal communication service
  - 10.1.2 Users need tbe in charge
  - 10.1.3 New business models required
  - 10.1.4 Industry control needs tbe changed inttrust
  - 10.1.5 Opportunities and challenges
  - 10.1.6 Unleashing market innovation
  - 10.1.7 Separation or partnerships?
  - 10.1.8 Conclusions
- 10.2 Revenues
  - 10.2.1 Revenue forecast
- 10.3 Market analyses
  - 10.3.1 The mobile content market in 2008
  - 10.3.2 The market for mobile digital media
  - 10.3.3 A market still kept hostage analysis
  - 10.3.4 New marketing and distribution models
  - 10.3.5 Premium Rate SMS (PSMS)
- 10.4 Products and services
  - 10.4.1 Off deck content
  - 10.4.2 Mobile fraud
  - 10.4.3 Ringtones and wallpaper
  - 10.4.4 Mobile email
  - 10.4.5 Voting
  - 10.4.6 Advertising
  - 10.4.7 Mobile music
- 10.5 Premium rate SMS (PSMS)
  - 10.5.1 The market in 2008
  - 10.5.2 Key players
  - 10.5.3 Premium SMS revenues
  - 10.5.4 Market analysis
- 10.6 Providers
  - 10.6.1 Mobile operators
  - 10.6.2 Service providers
11. Glossary of Abbreviations
- Table 1 Mobile data revenues by operator SMS and non-SMS 2007 - 2008
- Table 2 SMS growth forecasts 2003 - 2010
- Table 3 Telstra SMSs sent 2001 - 2007
- Table 4 Telemetry devices 1998; 2000; 2004
- Table 5 Telemetry market vertical market share forecast
- Table 6 Industry opinion regarding control of mobile content 2007
- Table 7 Industry opinion on partnerships 2007
- Table 8 Australian content market revenue 2005 - 2008
- Table 9 Mobile content ARPU per customer by operator 2007
- Table 10 Revenues PSMS market 2004 - 2008
- Table 11 PSMS market share by operator 2007
- Exhibit 1 Mobile TV viewing minutes in USA and Australia
- Exhibit 2 Broadcast Australia DVB-H trials 2005 - 2007
- Exhibit 3 Why mobile marketing wont work
- Exhibit 4 Service evolution vision
- Exhibit 5 Zeon Network key vertical markets targeted
- Exhibit 6 Three Services, One Network, One RadiDevice
- Exhibit 7 Two-way radimarket 1990 - 2010
- Exhibit 8 Two-way radisystems
- Exhibit 9 NSW Government RadiNetwork (GRN)
- Exhibit 10 The South Australian GRN
- Exhibit 11 Key issues for mobility industry
- Exhibit 12 Broadcast Australia DVB-H trials 2005 - 2007
- Exhibit 13 Bluetooth user statistics
- Exhibit 14 Industry opinion regarding mobile opportunities 2007
- Exhibit 15 Media companies are ready for mobile business, but channel-specific requirements are a challenge for them
- Exhibit 16 Mobile facts and figures
- Exhibit 17 What users want
- Exhibit 18 Key applications from data pack users
- Exhibit 19 Revenue mix PSMS
- Exhibit 20 belong clients and partners
- Exhibit 21 belong mobile services