Mobile internet – progress watch

By August 18, 2008Mobile

There is some interesting data on Mobhappy about the take-up of the mobile web here in the UK. As ever I will comment on a couple of highlights, and you should read the full post (or even the Ofcom survey it reports on) for the details.

First off – SMS revenues still dwarf data revenues – £2.7bn versus £1bn in 2007. This is interesting in the context of some of the chatter about Twitter’s decision last week to axe free SMS updates in Europe. People were reflecting on how absurd it is that we are still paying operators 5p per message (or whatever it is) when all they have to do is move a tiny amount of data. What makes it even more absurd is that services like IM which are in theory superior are effectively free to use within a flat rate data package. The fact that SMS revenues are 2.7x data revenues is interesting because it makes clear the dilemma that operators face – if they are too successful promoting the mobile web they will cannibalise their SMS revenues. For context voice revenues were £11.4bn in 2007.

Second – there is contradictory data around, but from this survey it appears that there isn’t much growth in use of the mobile web:

The report … cites data saying that just 5 percent of internet users age 15 and above used the internet on a “portable device” in Q108, unchanged from the previous year.

This is surprising to me given the launch of the iPhone in Q42007 and what I hear anecdotally.

  • It is mad. But, IM has been available on at least two operators handsets since around 2003. IM on small screens just doesn’t appear to have the same appeal as SMS. Perhaps, with IM you’re assuming that a conversation is about to take place and you don’t want to pursue it on the basis that a phone call makes more sense. SMSs conversations just seem to happen. I’m familar with the IM space having helped to launch AIM during the mid 90’s and then Segala did all the testing for O2’s IM client which never took off.

    SMS has been a major revenue generator for a long time and will continue to be so, for another while. Data is the obvious way forward, but it’s not going to bypass SMS for a few years to come in my opinion. Unlimited data needs to happen in order to gain mass adoption, so by then, operators will need to think of other revenue streams – such as a form of advertising – referrals/recommendations/advertorials…

  • It is mad. But, IM has been available on at least two operators handsets since around 2003. IM on small screens just doesn’t appear to have the same appeal as SMS. Perhaps, with IM you’re assuming that a conversation is about to take place and you don’t want to pursue it on the basis that a phone call makes more sense. SMSs conversations just seem to happen. I’m familar with the IM space having helped to launch AIM during the mid 90’s and then Segala did all the testing for O2’s IM client which never took off.

    SMS has been a major revenue generator for a long time and will continue to be so, for another while. Data is the obvious way forward, but it’s not going to bypass SMS for a few years to come in my opinion. Unlimited data needs to happen in order to gain mass adoption, so by then, operators will need to think of other revenue streams – such as a form of advertising – referrals/recommendations/advertorials…

  • Push email (as on Blackberry) has got to be a bigger threat than IM? IMO the network effects of SMS are too strong for it to be overtaken quickly – everyone has SMS on their phone whereas it will only ever be some people that have an IM client etc.

    SMS is starting to get hit in certain segments though e.g. business people (who all have blackberries and can use push email), youth (in South Africa they all use the Mxit mobile IM client rather than SMS).

    However, we have already seen the commoditisation of SMS to some extent with the massive inclusive bundles contract users get.

  • Push email (as on Blackberry) has got to be a bigger threat than IM? IMO the network effects of SMS are too strong for it to be overtaken quickly – everyone has SMS on their phone whereas it will only ever be some people that have an IM client etc.

    SMS is starting to get hit in certain segments though e.g. business people (who all have blackberries and can use push email), youth (in South Africa they all use the Mxit mobile IM client rather than SMS).

    However, we have already seen the commoditisation of SMS to some extent with the massive inclusive bundles contract users get.