2010 North American Consumer Mobile Communications Outlook

The North American mobile communications market reached 88.3 percent penetration in 2009, with more than 300 million mobile connections. Mobile operators continue to generate high mobile data revenues and the proliferation of broadband capable personal and productivity devices is the prime reason for the recent surge in adoption of mobile data services. Messaging services also continue to be used increasingly, and the messaging channel is also being used for a wider range of communication, entertainment, informational and commerce services.

With penetration rates of more than 88 percent for the entire region, the mobile market in North America can now officially be termed saturated. Mobile operators aspiring for better business outcomes are maximizing revenues from existing subscribers by offering innovative premium data services that run over next-generation wireless networks and devices. Mobile operators are also looking to offer additional ‘connections’ to existing subscribers – mainly wireless broadband Internet and other connected services – to augment revenues. The emergence of a broad range of connected devices is expected to push penetration of mobile services to more than 100 percent.

"The mobile phone is today the most important communications device and subscribers continue to rely on wireless services for their communication, entertainment and information requirements on-the-go," notes the analyst of this research service. "Besides voice, text-messaging has evolved as an important medium for communication, primarily because it can be used in a wide range of scenarios, is ubiquitous, and extremely cost-effective especially when used as part of a data plan." Other important and popular data services include mobile Internet, premium mobile content, and others. The impact of smart phones in driving data usage on the mobile networks is proven beyond doubt. Over 60 percent of North American mobile subscribers regularly use text messaging, and a majority of these are sent as part of a dedicated or a bundled data plan.

The biggest challenge is to ensure a satisfactory, pleasant and useful consumer experience and deliver maximum value to them. Even though the North American mobile operators are known for their zealousness in protecting the consumer experience, managing the end-user experience is not always possible since an increasing amount of traffic is going off-deck. This rapid explosion of content creates several operational impediments as well. Mobile operators are forced to expand their content catalogs and yet are not able to increase the data plan rates to justify this expansion. At a certain ‘tipping point’, it may become unfeasible to continue doing this without exploring other sources of revenues such as mobile advertising. In addition, bringing new devices to market at a rapid pace is not an easy task. Long product development cycles further complicate the matter. The big question is – how to increase ARPUs without getting caught up in a race to blindly add new services, devices, or network technologies. Operators also need to look into the value they bring to the Smartphone app store ecosystem and could again be turning into connectivity providers that mainly provide access to third-party or ‘over the top’ services.

While it is important to always seek new technologies, the question whether network technologies drive content or the promise of delivering next-generation content drives investments in networks will always remain. Mobile operators need to look at multiple strategic factors including cost and service pricing, content lineup, quality of service, and customer care, to compete successfully in this space. "Mobile operators could classify mobile content into various tiers, and match these to their customer demographics to determine the optimum mix they should have on their decks," says the analyst. "Apple’s iPhone, Android devices and the new generation of Blackberry devices are some examples of the possible impact compelling devices can have on subscriber uptake and service usage."

Market Sectors

Prepaid and postpaid mobile
SMS and MMS
Mobile Internet
Technologies

The following technologies are covered in this research:

3G, 4G
Next-generation devices
Mobile advertising and mobile marketing
Mobile banking and mobile payments