Mobile operators 'game' for big bucks?

Sunitha Natti

HYDERABAD: If outsourcing is today's sunrise industry in IT, it's close to high noon for data services in the wireless segment. According to a joint study by AT Kearne, Cambridge University and Mobinet, around 41 percent of the global wireless users are expected to use mobile data services daily within the next year.

Break up data services further and you have a flourishing wireless gaming market besides applications like mobile email and photo messaging, that generated revenues of $237.4 million in 2003 according to IDC's latest report on Asia/Pacific Wireless Gaming 2004-08 Analysis and Forecast (excluding Japan). The research firm believes that this is expected to reach $1.3 billion in 2008 -a CAGR of 40 percent.

According to Telecom Regulatory Authority of India (TRAI), the average revenue per user (ARPU) of mobile operators for quarter ended March 2004 was Rs 436, down from Rs 457 in the previous quarter. Also average monthly ARPU in India is around $11, compared to $72 in Japan and $53 in North America.

A report from research agency In-Stat MDR on the wireless market in India says that the ARPU for Indian mobile operators shows declining prospects over the next several years as growth among the less affluent subscribers is expected to take a hold. The report also predicts ARPU to decline from the present $11 to $10.58 by 2007.

However, it predicts a steady growth after 2009 when newer data services become more widely used.

Hence, it is imperative that mobile operators have to roll out attractive voice and data services for the anticipated big-ticket growth in the wireless market. E-mail was the frontrunner for increased usage of personal computers. Similarly, mobile operators too have to introduce applications that can boost the mobile usage to a large extent.

It's evident that operators have recognized the revenue potential that data services can bring in. Though the current revenues being generated by the non-voice services are not meatier than the voice-based services, operators have brought in a fresh crop of prospects offering various wireless-related entertainment services. Among them is wireless gaming, which is conjuring up the market wildly.

Adding feathers in this wireless gaming ecosystem are the carriers that are providing next generation networks. Hutch, has recently announced its plans to provide EDGE service (GSM subscribers) for better voice and data transfers. Also CDMA 2000 1xEV DO have been in place for quite some time.

Color phones with General Packet Radio Services (GPRS) for high-speed Internet access that allows better browsing and easier downloading of games are also becoming popular with customers. However, operators can make this service user-friendly only by providing top 10 games, user preferences, ease of downloads and clear instructions to follow.

Games such as Tom Clancy Splinter Cell and Lara Croft Tomb Raider are gaining popularity and selected range of consumers are willing to fork out the extra money to pay for premium games.

With the demand thus seen in consumers downloading and playing games, there seems an accelerating need for feature-rich handsets. Betting high on this demand, equipment manufacturers are introducing advanced multimedia phones, convergence chipsets, enhanced PDA's and many more into the market.

If better marketing, lower data prices, greater service availability, faster transmission speeds, richer handset features and more intuitive user interfaces were to add colors to this picture, it would mean a revenue of Rs 14,800 crore in India - of course, by the end of 2008 - as per the Gartner report.