Optimising the Mobile Content Value Chain

SUMMARY

Mobile content has been heralded as the saviour of declining operator voice revenues by industry and analysts alike. However, despite significant growth in content revenues over the last few years and a slowing of the pace of decline in overall operator margins, the fact remains that mobile network operators are under pressure to cut costs wherever possible, even in growth areas like mobile content.

Previous work in the MWP program - including Optimising Mobile Multi-Media Portal Investment Returns, January 2007, Wireless Operator Portal Development Strategies, December 2006 and Assessing Mobile Content Revenue Opportunities, April 2006 - has examined the revenue potential of digital content to replace (at least in part) falling voice ARPU.

• This work shows that, while there is significant revenue potential, the MNO community has found it difficult to address in certain respects and - as the area has been considered strategic to the future of the MNO - business justification rules may not have been rigidly applied in the rush to develop and deploy capability.

This report builds on the previous body of work and explores business models that will deliver acceptable levels of profitability to MNOs from digital content in an environment where business justification rules will be much more firmly enforced as cost-cutting programs focus on areas where MNOs have previously spent without achieving a return. The report concludes with recommendations for MNOs to help them maximise the revenues (and profitability of those revenues) that can result from their unique value chain position and relationship with users of mobile content services.

TABLE OF CONTENTS

1. Overview

2. Introduction

• 2.1 Background & Report Objective
• 2.2 Report Structure

3. The Mobile Content Market

• 3.1 Origins of the Mobile Content Market
• 3.2 The Operator Portal
• 3.3 The Off-Portal Model
• 3.4 Options Available
• 3.5 Optimal Model Approach

4. MNO Portal Approaches

5. The On-Portal Model

• 5.1 Cost of Delivering Content Revenues
  • 5.1.1 Source, Select & Manage Content Providers
  • 5.1.2 Content Rendering & Device Management
  • 5.1.3 Portal Layout & Design
  • 5.1.4 Develop Transport & Billing Capabilities
  • 5.1.5 Develop Services and Promote Content to Subscribers
  • 5.1.6 Customer Support & Management
• 5.2 On-Portal Examples
  • 5.2.1 Example 1: Tele2 Sweden's mobile portal
  • 5.2.2 Example 2: 3 Italy - Mobile TV
  • 5.2.3 Example 3: 3 UK - Mobile Music Platform
  • 5.2.4 Example 4: 3 Sweden - Third party integration

6. The Off-Portal Model

• 6.1 The Off-Portal Value Chain
• 6.2 From SMS to Mobile Internet
• 6.3 Off-Portal Examples
  • 6.3.1 Example 5: Gratismobilspel.se (Free mobile games)
  • 6.3.2 Example 6: Vodafone UK Outsources Alerts & Information Service Delivery to WIN
  • 6.3.3 Example 7: McDonald's Finding Nemo - Germany
  • 6.3.4 Example 8: Player X - i-mode Site Development

7. Conclusions

8. Recommendations