Europe Telecom Insider / Vol. 3, No 1, Edition 6 - The Peril and Promise of Mobile Social Networks for Operators
Pyramid Research, Inc, June 2011, Pages: 15
With Facebook user penetration reaching almost half the population in some European markets such as the U.K. and Sweden, operators must learn how to optimize mobile social networking through a powerful combination of devices, access and content, according to a new report.
The Peril and Promise of Mobile Social Networks for Operators provides an overview and context of social networking on mobile phones, as well as how communications patterns are changing. Pyramid Research also examines how developments on the device are being influenced by social networking. There follows a section on how operators are using tariffs to attract users, and how they are changing to avoid cannibalizing voice and text with data. Additionally, the report underlines the importance of operators being able to track the development of communications patterns and highlight how several operators are doing this. Pyramid finally presents case studies of mobile social networking in four European countries: France, Netherlands, Spain and the U.K.
Mobile social networking is enjoying strong growth as Facebook approaches 700 million users worldwide with more than 40 percent, or nearly 300 million, accessing the site through mobile devices. “Social networks have provided mobile operators with additional revenues, driving new users to adopt mobile Internet access and existing users to increase their data usage,” says Pyramid Research analyst at large, Jan ten Sythoff. “Non-messaging data revenues are the fastest revenue growth segment for mobile operators, with a 2010-2016 CAGR of almost 15 percent, compared with around 4 percent for messaging and -3 percent for voice,” he indicates.
In November 2010 Facebook launched its email service and hopes to become a messaging hub, with all IM, email and SMS conversations in a single place. “It also has the potential to become the central contact center, possibly adding voice and video communication,” says Sythoff. “This threatens operators both directly, by impacting their voice and messaging revenues, and indirectly because their brands are overshadowed by social networking brands. Operators therefore need to strike a delicate balance between leveraging the demand for social network mobile access and the threat of social networking cannibalizing their basic suite of services,” he adds.
“Pyramid suggests operators clearly track developments in communications patterns in different segments, and so be positioned to make necessary changes to optimize revenue across different communications methods,” notes Sythoff. “At the same time, continue to differentiate to capitalize on the growth in mobile social networking by offering innovative devices, tariffs and services and improving the user experience,” he says.
Key findings
- Social networks have become a well-established new communication channel, driving strong demand for mobile data access.
- Social networks and other IP communications methods are impacting communications patterns, and in turn can negatively impact voice and text services.
- Mobile social networking usage can be optimized through a powerful combination of devices, access and content, which will continue to drive future growth.
- There continue to be trends adding additional types of communication, but there are also trends suggesting that different communication methods are beginning to converge.
INTRODUCTION
SOCIAL NETWORKS’ THREAT TO MOBILE NETWORK OPERATORS
A. Operators must continue to focus on the best user experiences by offering innovative devices
B. Operators must balance tariffs that attract social networking users while limiting cannibalization of basic service revenues
C. Operators must learn as much as they can about social networking to best plan for future developments
MARKET DETAIL
CASE STUDY: France
CASE STUDY: Netherlands
CASE STUDY: Spain
CASE STUDY: UK
CONCLUSIONS
Key findings
Recommendations
RELATED RESOURCES
Table of Exhibits
Exhibit 1: Facebook total and mobile user growth, September 2009 to March 2011
Exhibit 2: Facebook population penetration by country, May 2011
Exhibit 3: Western Europe mobile operator voice, messaging and data revenue growth, 2006-2016
Exhibit 4: Use of online time by UK internet users, 2007 and 2010
Exhibit 5: INQ and HTC social networking-focused devices
Exhibit 6: KPN’s key strategic objectives, 2010 and 2015
Exhibit 7: Hi mobile Internet bundles
Operators must continue to attract mobile social networking users through innovative devices and attractive tariffs, but they must also learn about social networking in order to be at the forefront of changing communications patterns and to time the changes in tariff structures across their portfolio to minimize cannibalization of their core services.
This report analyzes the development of social networking on mobile devices in Europe and the impact on mobile network operators. It starts by providing an overview and context of social networking on mobile phones, and how communications patterns are changing. We then look at how developments on the device are being influenced by social networking. There follows a section on how operators are using tariffs to attract users, and how they are changing to avoid cannibalizing voice and text with data. We then underline the importance of operators being able to track the development of communications patterns and highlight how several operators are doing this. We then present case studies of mobile social networking in four countries in Europe: France, Netherlands, Spain and the UK.
- 3
- Bouygues
- e-plus
- Facebook
- Foursquare
- HTC
- Hutchison Whampoa
- Hyves
- INQ Mobile
- KDDI
- KPN
- Microsoft
- Nokia
- O2
- Orange
- Samsung
- Saunalahti
- SFR
- Skype
- Skyrock
- Telefónica
- Telenor
- T-Mobile
- Tuenti
- Virgin Mobile VKontakte
- Vodafone
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