Interesting updated numbers on mobile from Netsize Guide 2008

The mobile telecoms industry has a very good annual report, the Netsize Guide, which looks at 25 major countries in the (mobile telecoms) world, and major trends and news stories in the industry. The 2008 edition of the Netsize Guide has been released. Here are some numbers that have developed significantly to warrant some comments.

Migration to 3G.

Last year there had been about 434 million 3G phones that had shipped cumulatively since 2001. Out of those, TomiAhonen Consulting estimates 415 million 3G phones were in use. But as many colleagues have pointed out also here at this blog, those 415 million 3G phones are not used all for 3G services on 3G networks. Only about half of the world's networks have so far launched 3G commercially, for example China - the largest mobile telecoms market with over 500 million subscribers, has yet to do so. So as we look at mobile being a new media channel, the high(er) speed 3G phones and networks - and subscriptions to them - are an important measure.

The Netsize Guide 2008 offers the national 3G migrations for those of the countries where 3G has been launched. By that we can count that out of the 20 countries in the Guide that are in the Industrialized World - ie West Europe, North America and Japan and South Korea - a total of countries covering nearly a billion people - the average 3G migration rate was 23% as of the third quarter 2007. Obviously there is some further development in that, so today we can safely say one in four mobile phone subscribers in the Industrialized World, is using a 3G subscription, not only a 3G phone. Bodes well for advanced service consumption from music video downloads to picture uploads to videogaming etc. Bear in mind, the current Apple iPhone is not a 3G phone (but a 3G iPhone is due soon, according to most pundits following the iPhone)

Bear in mind, that is not the total global 3G subscriber base (which is larger, 3G has launced in many Latin American countries after Brazil did it, and in Africa after South Africa did it, etc - but the 3G subscriber numbers in the Developing World are obviously quite modest); it is not even the total Industrialized World 3G subscriber base (missing such relevant Asian countries as Taiwan, Singapore, Hong Kong, as well as Australia and New Zealand etc)

Still, in these 20 Industrialized Countries, these 209 million 3G subscribers do deliver approximately 120 Billion dollars of 3G telecoms revenues annually (or about 14% of the total revenues of the global industry) and well over a third of the revenues in the Industrialized World. For anyone who might still be doubting "if 3G will ever be a success" - and those who "accused" the industry of "wasting" 100 Billion dollars in the license fees for 3G, we're now seven years after those auctions, and the annual revenues earned by the 3G industry already stronlgy exceed the total license spending.

Music

We've been talking here at the Communities Dominate blog that the total revenues for the music sold to mobile phones has been growing steadily, and the latest numbers I've quoted here were from mid-2007 numbers which said the annual mobile music revenues would be 8.8 Billion dollars in 2007 (vs about 2 B on iTunes or the 30 B total that the industry earns worldwide). Now Netsize Guide 2008 updates those numbers for the final 2007 numbers at 9.3 B dollars. Half of that income is earned in Asia, and yes, still today ringing tones for the biggest part of the income, but newer forms from Ringback (Waiting) Tones to RealTones to Full Track MP3 Downloads to Music Video and Rentals, are all generating major chunks of the total mobile music pie. And we're clearly on track to cross 10 B dollars during this year out of total mobile music spend.

Gaming

Another strong component in the mobile content mix, is gaming. Netsize Guide 2008 reports that in 2007, mobile gaming was worth 5 Billion dollars worldwide. And over 60% of all gaming revenues are earned in Asia

Mobile Content Total Revenues 2007

Finally we have quite an amazing number. We've told you earlier in 2007 that we expected the mobile content industry to cross the 50 Billion dollar level during 2007. Boy did it ever? The Netsize Guide 2008, by adding up the Data ARPU levels in only the 25 leading countries that are represented in the Guide, bring the total Non-Voice, Non-SMS texting revenues of Mobile Content, at 66.6 Billion dollars. That is for the 25 countries covered. If we assign the lowest mobile content ARPU level in the report - that from India - to the rest of the world, then at even that low level the global mobile content in 2007 is worth at least 72 Billion dollars. That is 8.6% of the total worldwide mobile telecoms service revenues in 2007.

NOTE on Dollar Exchange Rate

I do want to point out, that while the growth rates in mobile content (and SMS text messaging and mobile voice) revenues have been impressive over the past two years, there is a factor of the falling value of the USA dollar at the same time. The vast majority of the world's mobile phone subscribers are outside the USA (93% of all cellphone subscribers) and even though the Americans spend more on their phones than almost anyone on the planet, the USA accounts only for 15% of the total global industry in revenues. So when customers in other countries, consume more mobile telecoms services measured in UK Pounds, Chinese RMB, Swiss Franks, Euros, Japanese Yen etc, these when converted to the US dollar will produce an artificially large difference when measured in the dollar. Even the Canadian dollar is stronger than the US dollar

Yes, mobile content has grown very strongly, but part of the number exaggerates the growth when measured in the US dollar, which itself has diminished in value. If we compare the growth rate in Euros, for example (and this year's Netsize Guide uses the Euro as a standardized currency for the first time) - then the growth rate is not quite that dramatic. But, currency fluctuations are a fact of life, and there have been opposite fluctuations, as the US dollar has gained in the past, and given "artificially" high values for USA based companies and industries. This in itself is no reason to dismiss mobile, but I do want to make the point, that some of the image of an exceptionally strong growth rate, has been due to the simultaneous decline in the value of the global measurement currency, the US dollar.

Still, we measure other global industries also in dollar denominations. The mobile content industry (excluding SMS text messaging and voice) is already far larger than Hollywood or the global music business or videogaming. Now at (more than) 72 Billion dollars in annual revenues, the mobile content industry has just grown to be larger than worldwide radio ($69B), and rapidly approaching the sizes of global sports entertainment industries (Football, Basketball, Formula One, Tennis, Golf, etc) at $96 B and the worldwide Casino (Las Vegas, Macao, Monaco, Atlantic City, Reno etc) business at $102 B dollars in total revenues. (These industry sizes are from PriceWaterhouseCoopers annual Media Outlook 2007 report)

This mobile industry is a juggernaut. Remember that the mobile content industry is going to be only 10 years old this year (the first mobile content, the downloadable Ringing Tone was sold in Finland in the Autumn of 1998). And already its a 72 Billion dollar global industry. Like we've said many times, this is the industry to be in.

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