Mobile internet to become a mass market

At the same time, we know that the GSM MoU, which became the foundation of mobile communications, is slightly more than 20 years old, as the signature took place in 1987. The latest statistics published by the GSMA show that there are 3.6 billion global users of GSM and 3GSM connections, or in other terms, mobile communication users represent more than 50% of the world population.

We, as technology supporters, have anticipated for long the merger between internet access and mobile communication: the first 3G licenses were issued 10 years ago in Finland. Surprisingly this merger between Internet access and mobile communication does not yet represent a massive market. 3G accounts only for 300 million connections according to GSA, and the both the largest mobile communication market (China) and the fastest growing mobile communication market (India) are still not embracing 3G. In China, the licenses have just been issued, and operation is to start in a couple of months, and in India, licenses are about to be issued. Even in markets where 3G licenses have been in operation for years, the technology has not yet reached massive penetration.

In countries with the highest 3G penetration, such as Norway, Sweden or Italy, statistics demonstrate the primary use of 3G is mobile television, especially as a means for mobile users not to miss a minute of major sport events. Only recently, the Apple iPhone has demonstrated there was a means to develop other type of mobile applications, and to create a revenue stream associated with these mobile applications.

In 2009, we expect to see the arrival of new, more affordable mobile internet devices, and the development of more practical mobile internet applications, such as health, M2M, or enterprise oriented applications. The leading compelling application that would trigger users to switch to 3G is yet to be found. Also, a better business model that ensures mobile network operator ARPU is kept at sustainable levels, while application developers and content providers get a fair revenue stream is yet to be finalized. These developments are the best opportunity for mobile network operators to ensure their future business is profitable, and they are not at risk of becoming just a data pipe.

Thierry Spanjaard
Chief Editor
Smart Insights