Greetings!

According to a new study by Wireless Intelligence, mobile revenue growth has continued to outperform GDP growth in most of the leading economies during the last year. The global mobile industry growth has been driven by two mega trends:

• The exploding subscriber base in emerging markets like India and China
• The rapid democratisation of high-end applications in mature western markets

Over the last few years, we have seen a decline in voice-related average revenue per user (ARPU) across the emerging as well as mature markets. The focus is on value-added services (VAS) and mobile content services to compensate this. On one side, new technologies like 3G will fuel growth of VAS and content adoption. On the other side, mobile number portability will increase user churn tendency.

In saturated and highly competitive western markets, the key revenue growth driver for 2010 will be application stores. The success of the iPhone application store has demonstrated strong demand for mobile content and applications offered in a user-friendly manner. The slew of recent announcements from O2 Litmus, China Mobile and Vodafone Betavine, among others, has demonstrated the enthusiasm with which mobile operators are adopting mobile application stores. The battle of the application stores will result in a market shift over the next 12-18 months.

However, in the third quarter of 2009, we have seen that operators’ net revenue is no longer proportional to growth in subscriber bases - or the number of applications being launched. Several factors have led to this, including continuously falling voice revenue, insufficient adoption rate of value-added services failing to plug this gap and low usage amongst new users.

2009 trends suggest the strategic way forward for operators, highlighting the need to shift their marketing focus from products and pricing to promotions. Success is not in merely launching new tariff plans, services and applications, but reaching out to millions of subscribers with right products, offers and applications at the right time.

In 2010, operators’ focus will be on generating incremental revenue by shifting their focus from customer acquisition to subscriber value maximisation, and mobile marketing will play a pivotal role in operators’ strategies. However, the value of mobile marketing will be fully appreciated only if operators adopt the right technologies, accurately track responses, measure ROI, and continuously innovate their marketing strategies. Once operators are able to demonstrate the intrinsic value of mobile as a marketing channel, mobile advertising as in third party brands using mobile as a channel for their advertising will also take off in a big way.

Flytxt wishes you a prosperous new year.