Despite the MWC buzz, the future for operators remains tough

Having now recovered from the excesses of Mobile World Congress--that's the work element, of course--the event, on reflection, was one of the more grounded for some years.

Operators and infrastructure vendors appeared to be more realistic about what was possible over what period, the attempt to establish a common standard for mobile apps made sense (albeit perhaps hard to achieve), mechanisms to tackle burgeoning data traffic became realistic, and the acceptance that M2M could be a force for the next wave of innovation could prove interesting.

However, App Planet in Hall 7 of the Fira could also indicate that the cellular industry is undergoing a transition that will see the emergence of new global players, such as Google, Facebook and Skype, who start to dictate the future shape of mobile--and become an even greater source of worry for operators.

However, for a more incisive perspective on this trend, read Keith Mallinson's latest Industry Voice as featured in this edition.

But what didn't gain much air-time was how quickly mobile operators in Western Europe could recover after being hit by two years of recession and financial turmoil.

According to the market research firm Analysys Mason, end-user spend in this region was down more than 4 per cent in 2009, and would decline at a compound annual growth rate (CAGR) of nearly 2 per cent until 2012.

The firm claims that margin for loyalty trade-offs, margin for volume trade-offs and SIM-only contracts are some of the operator strategies that have fundamentally altered consumer perceptions of value and pricing.

Also, the research company believes that consumers are becoming progressively more polarised in their mobile spending habits. "As one group of customers pares its spending back to SIM-only contracts, another rapidly growing group enthusiastically adopts smartphones," said a consultant at Analysys Mason. "Our forecasts indicate an 11 per cent CAGR for mobile handset non-messaging data until 2012, but this growth will be hampered by increasingly rigid perceptions of what a mobile contract should cost."

While the firm reports that operators will find it ever more difficult to maintain price premiums and gain additional spend from new services, it does believe that modem-based mobile broadband will provide an as yet small but essentially new revenue stream. Albeit that Analysys Mason predicts this segment will grow at a 33 per cent CAGR until 2012, its overall impact on revenues will remain small.

Altogether, a somewhat gloomy picture--but the art of crystal ball gazing is today more hazy than at anytime for the cellular community, as it is for many other industries and governments.

Better to accept that the market has radically shifted, and continue to push forward--almost regardless of the market data.-Paul

P.S. To mangle a quote made by Andrew Lang (1844-1912): "Don't use statistics as a drunken man uses lamp-posts... for support rather than illumination."