This is a wonderful industry to be involved in, mobile. Like I like to say, it is a magical money-making machine. And look at the numbers. We have several analysts reporting that the industry grew again in 2009, from Informa to Portio to Chetan Sharma etc. As regular readers know, my company TomiAhonen Consulting tracks industry stats and reports on them. It is now nearing the end of the year, and I am, ready to make some big picture projections to the industry final revenue numbers for this year. Last week I told about the break-downs of that 4.6 billion subscriber count. So lets look at how the money works in this biz..
UPDATE - 5 February 2010: I have written a total industry statistics update which supercedes the information on this blog page. See the full Mobile Industry Stats 2010
900 BILLION THIS YEAR
Total industry service revenues will hit 900 billion dollars this year. This is the big growth number. Chetan Sharma Consulting told us that 2008 total revenues were worth 835 billion dollars, so to pass 900 billion, our idustry grew revenues this year by 8%. Not bad in a time of recession, eh? Obviously its significantly less growth than the 15% we had in total subscriber numbers this past year, but revenue growth is revenue growth, and in times of downturns, any revenue growth is very good news indeed. (and those who don't know, this industry is almost universally profitable, we sustain EBITDA margins between 35% and 45% globally, in almost every market. Very "poorly" performing markets like currently the over-heated UK mobile market still earn EBITDA margins of 20%-25%, and in most industries CFOs and financial controllers would give away all their spreadsheets for such strong profitability numbers).
MOBILE DATA 220 BILLION
But yes, I am now ready to call this year at 900 billion dollars in total revenues for mobile. And then what part is data? Ah, an interesting number indeed. We see mobile data growing at stronger rates than the overall industry and I project mobile data to hit about 220 billion dollars this year. As Informa adjusted their early 2009 projection of mobile data for 2008 down from 200 billion to 188 billion as they said this June, I trust this number to be very accurate as a "final" mobile data number for 2008. That reflected 23% growth from 2007 in the year when the economy then "cratered". Now I project 17% growth rate for mobile data for this year, and yes we will hit 220 billion dollars when the numbers finally come in. SMS text messaging will account for approx 120 billion dollars out of that. And yes, the non-basic SMS text messaging, mobile "premium data" industry will hit 100 billion dollars in value this year. WOW, that is a big number.
So, as it has been for more than a year already, mobile service revenues alone are bigger than all fixed landline telecoms related revenues combined, that of fixed landline voice calls, all data services and all landline, broadband, etc internet revenues. Mobile alone bigger than all of that. And this year 2009 is likely to be the year when mobile data (including SMS) will be bigger than all internet revenues including dial-up, broadband access, internet content and subscriptions, and internet advertising fees, put together.
So what is the biggest part of mobile data? SMS is the giant (biggest data application on the planet, over 3 billion active users, 2.5 times bigger than all PC based email by users globally), then next biggest - MMS.. yes, MMS. Did you pay attention, MMS, picture messaging, used by over 1.6 billlion people on the planet already, and delivering over 30 billion dollars of revenues - MMS alone is bigger than the global music industry.. And before you say "but I don't send MMS" maybe you don't, but Informa measured that across the planet we already average 3.5 MMS sent per mobile subscriber per month - almost one MMS sent per week - across all mobile subscribers, both active and inactive users of MMS. Almost half of Asians send MMS, and in Norway 84% of the population use MMS at least monthly according to this year's measurements by TNS Gallup. Yes, the second biggest mobile data service by revenues, after SMS, is MMS.
What of mobile content? Music continues to be the biggest mobile content category far in excess of 10 billion dollars annually. I am not yet ready to call the exact number for mobile music but it is clearly the biggest of the mobile content revenues. Mobile music includes ringing tones, true-tones, ringback tones, full-track MP3 downloads, various music subscription services, and a vast range of more exotic music services from Shazam to background music to music gifts to mood music. But yes, this is far beyond ten billion dollars in value, nearer 15 billion than 10 actually. Will update you when I am ready to give final count.
Voice is obviously the big revenue source for mobile telecoms. Note that voice minute costs are declining globally and there is an increasing proportion of mobile phone users who never originate voice calls at all (but use SMS text messaging). The proportion of mobile subscribers who never initiate voice calls was measured by Lightspeed to have been between 11% and 13% in the Industrialized World in 2008. Meanwhile in the Developing World, such as India, the proportion who do not originate voice calls is up to 30% of all mobile phone subscribers (while SMS is used by 90% of all mobile phone owners in India).
ARPU DECLINING
And yes, the industry is adding customers in very poor countries, who contribute anything from 5 dollars per month in China to 1 dollar per month in Bangladesh. This to an industry where the global "ARPU" Average Revenune Per User (and counted as "per active subscription" ie if you have two subscriptions on two networks, then you are two users, and your monthly spend is 2x ARPU for your country) very recently used to be 20 dollars. The ARPU is naturally a declining number, there is no "bad news" about this, on the contrary, when measured against SSS (Same Subscriber Sales) all markets show that existing customers will consume MORE revenues every single quarter, on the average across the whole active subscriber base. But yes, because the industry is spreading to every less wealthy parts of the planet, we are adding ever poorer subscribers who contribute far less per month, on average - but still add to the total revenues of the network. And yes, the overall ARPU is now down to 16.30 dollars per month. Out of that, 24% is data revenues, 76% is voice revenues, globally.
I want to make a point here. As over a third of all people who have a mobile subscription actually have two or more subscriptions, the real "average revenue per USER" rather than per active subscription, allowing for multiple ownership by a third of all subscribers; brings the global ARPU if measured by unique mobile phone owners/users, to 22.05 dollars. And this number has been remarkably consistent over time for this decade. As the overall ARPU per subscription has declined, but as the planet has gone from one user = one phone = one subscription, to now one in three mobile phone users having more than one active account the average spent per user on mobile has remained very consistently a little above 20 dollars per month globally. A very healthy industry indeed..
WHAT OF 3G
I have the ballpark figures for 3G, we are at about 325 billion dollars of annual revenues this year for 3G. So for the almost exactly 600 million active subscribers to 3G services (most in the Industrialized World, nearly half of Western European mobile phone users now have a 3G account), their average revenue per 3G subscription is 45.13 US dollars per month. I wrote recently at this blog, that 3G has more than proven itself and is a very lucrative industry, inspite of all that doom and gloom we had earlier in this decade about the "excessive" 3G license fees in some auctions etc. But yes, in very rough terms, about a third of all subsciptions in the Industrialized World are now 3G subscriptions, and they deliver roughly speaking a bit over a third of the world's mobile telecoms revenues.
WHAT OF THE DEVELOPING WORLD?
And a particular interest to me increasingly is the mobile industry now in the developing world. Nearly three out of four mobile phone users is in the Developing World. They deliver roughly speaking a third of the industry's total revenues. But I will do a bit of a "digital divide" blog separately soon to explain that part more, and compare and contrast the two.
But yes, the big numbers to remember - Mobile Telecoms Service Revenues (before handsets and network infrastructure sales) is now worth 900 billion dollars. Mobile alone is bigger than the fixed landline industry and the total internet industry combined.
Mobile data is worth 220 billion dollars this year. SMS is the biggest part at 120 billion, with mobile VAS services another 100 billion. MMS is the second biggest mobile data revenue generator, and music still the biggest mobile content generator.
The global mobile ARPU is down to 16 dollars when measured against the active subscription count of 4.6 billlion mobile subsribers globally, but is at 22 dollars when measured against the unique user count of 3.4 billion unique mobile phone users at the end of the year 2009.
The mobile data portion of total mobile revenues keeps growing and is now at 24% of all mobile service revenues. The proportion of 3G continues growing and deliver 325 billion dollars, and also, the proportion of the Developing World delivering revenues to the total industry keeps growing, where today a third of all mobile telecoms service revenues are earned in Africa, Latin America, the Middle East, and the less-developed parts of Asia such as India, China and Indonesia. It is a good business to be in, one that grows even when the economy is experiencing its biggest downturn in a lifetime. If you do not have a mobile strategy - isn't it time to get one now? And for those who want to understand the mobile industry, remember that I have a free mobile industry "Thought Piece" which in just two fact-filled pages, summarizes the mobile telecoms industry size. You'll get it if you write to me at tomi (at) tomiahonen (dot) com.
UPDATE Feb 10, 2010 - The TomiAhonen Almanac has now been released, it has 180 pages, 84 charts and tables (13 more than the 2009 edition) with sample stats, first opinions and ordering info at this story TomiAhonen Almanac 2010 Released.
UPDATE - 5 February 2010: I have written a total industry statistics update which supercedes the information on this blog page. See the full Mobile Industry Stats 2010
900 BILLION THIS YEAR
Total industry service revenues will hit 900 billion dollars this year. This is the big growth number. Chetan Sharma Consulting told us that 2008 total revenues were worth 835 billion dollars, so to pass 900 billion, our idustry grew revenues this year by 8%. Not bad in a time of recession, eh? Obviously its significantly less growth than the 15% we had in total subscriber numbers this past year, but revenue growth is revenue growth, and in times of downturns, any revenue growth is very good news indeed. (and those who don't know, this industry is almost universally profitable, we sustain EBITDA margins between 35% and 45% globally, in almost every market. Very "poorly" performing markets like currently the over-heated UK mobile market still earn EBITDA margins of 20%-25%, and in most industries CFOs and financial controllers would give away all their spreadsheets for such strong profitability numbers).
MOBILE DATA 220 BILLION
But yes, I am now ready to call this year at 900 billion dollars in total revenues for mobile. And then what part is data? Ah, an interesting number indeed. We see mobile data growing at stronger rates than the overall industry and I project mobile data to hit about 220 billion dollars this year. As Informa adjusted their early 2009 projection of mobile data for 2008 down from 200 billion to 188 billion as they said this June, I trust this number to be very accurate as a "final" mobile data number for 2008. That reflected 23% growth from 2007 in the year when the economy then "cratered". Now I project 17% growth rate for mobile data for this year, and yes we will hit 220 billion dollars when the numbers finally come in. SMS text messaging will account for approx 120 billion dollars out of that. And yes, the non-basic SMS text messaging, mobile "premium data" industry will hit 100 billion dollars in value this year. WOW, that is a big number.
So, as it has been for more than a year already, mobile service revenues alone are bigger than all fixed landline telecoms related revenues combined, that of fixed landline voice calls, all data services and all landline, broadband, etc internet revenues. Mobile alone bigger than all of that. And this year 2009 is likely to be the year when mobile data (including SMS) will be bigger than all internet revenues including dial-up, broadband access, internet content and subscriptions, and internet advertising fees, put together.
So what is the biggest part of mobile data? SMS is the giant (biggest data application on the planet, over 3 billion active users, 2.5 times bigger than all PC based email by users globally), then next biggest - MMS.. yes, MMS. Did you pay attention, MMS, picture messaging, used by over 1.6 billlion people on the planet already, and delivering over 30 billion dollars of revenues - MMS alone is bigger than the global music industry.. And before you say "but I don't send MMS" maybe you don't, but Informa measured that across the planet we already average 3.5 MMS sent per mobile subscriber per month - almost one MMS sent per week - across all mobile subscribers, both active and inactive users of MMS. Almost half of Asians send MMS, and in Norway 84% of the population use MMS at least monthly according to this year's measurements by TNS Gallup. Yes, the second biggest mobile data service by revenues, after SMS, is MMS.
What of mobile content? Music continues to be the biggest mobile content category far in excess of 10 billion dollars annually. I am not yet ready to call the exact number for mobile music but it is clearly the biggest of the mobile content revenues. Mobile music includes ringing tones, true-tones, ringback tones, full-track MP3 downloads, various music subscription services, and a vast range of more exotic music services from Shazam to background music to music gifts to mood music. But yes, this is far beyond ten billion dollars in value, nearer 15 billion than 10 actually. Will update you when I am ready to give final count.
Voice is obviously the big revenue source for mobile telecoms. Note that voice minute costs are declining globally and there is an increasing proportion of mobile phone users who never originate voice calls at all (but use SMS text messaging). The proportion of mobile subscribers who never initiate voice calls was measured by Lightspeed to have been between 11% and 13% in the Industrialized World in 2008. Meanwhile in the Developing World, such as India, the proportion who do not originate voice calls is up to 30% of all mobile phone subscribers (while SMS is used by 90% of all mobile phone owners in India).
ARPU DECLINING
And yes, the industry is adding customers in very poor countries, who contribute anything from 5 dollars per month in China to 1 dollar per month in Bangladesh. This to an industry where the global "ARPU" Average Revenune Per User (and counted as "per active subscription" ie if you have two subscriptions on two networks, then you are two users, and your monthly spend is 2x ARPU for your country) very recently used to be 20 dollars. The ARPU is naturally a declining number, there is no "bad news" about this, on the contrary, when measured against SSS (Same Subscriber Sales) all markets show that existing customers will consume MORE revenues every single quarter, on the average across the whole active subscriber base. But yes, because the industry is spreading to every less wealthy parts of the planet, we are adding ever poorer subscribers who contribute far less per month, on average - but still add to the total revenues of the network. And yes, the overall ARPU is now down to 16.30 dollars per month. Out of that, 24% is data revenues, 76% is voice revenues, globally.
I want to make a point here. As over a third of all people who have a mobile subscription actually have two or more subscriptions, the real "average revenue per USER" rather than per active subscription, allowing for multiple ownership by a third of all subscribers; brings the global ARPU if measured by unique mobile phone owners/users, to 22.05 dollars. And this number has been remarkably consistent over time for this decade. As the overall ARPU per subscription has declined, but as the planet has gone from one user = one phone = one subscription, to now one in three mobile phone users having more than one active account the average spent per user on mobile has remained very consistently a little above 20 dollars per month globally. A very healthy industry indeed..
WHAT OF 3G
I have the ballpark figures for 3G, we are at about 325 billion dollars of annual revenues this year for 3G. So for the almost exactly 600 million active subscribers to 3G services (most in the Industrialized World, nearly half of Western European mobile phone users now have a 3G account), their average revenue per 3G subscription is 45.13 US dollars per month. I wrote recently at this blog, that 3G has more than proven itself and is a very lucrative industry, inspite of all that doom and gloom we had earlier in this decade about the "excessive" 3G license fees in some auctions etc. But yes, in very rough terms, about a third of all subsciptions in the Industrialized World are now 3G subscriptions, and they deliver roughly speaking a bit over a third of the world's mobile telecoms revenues.
WHAT OF THE DEVELOPING WORLD?
And a particular interest to me increasingly is the mobile industry now in the developing world. Nearly three out of four mobile phone users is in the Developing World. They deliver roughly speaking a third of the industry's total revenues. But I will do a bit of a "digital divide" blog separately soon to explain that part more, and compare and contrast the two.
But yes, the big numbers to remember - Mobile Telecoms Service Revenues (before handsets and network infrastructure sales) is now worth 900 billion dollars. Mobile alone is bigger than the fixed landline industry and the total internet industry combined.
Mobile data is worth 220 billion dollars this year. SMS is the biggest part at 120 billion, with mobile VAS services another 100 billion. MMS is the second biggest mobile data revenue generator, and music still the biggest mobile content generator.
The global mobile ARPU is down to 16 dollars when measured against the active subscription count of 4.6 billlion mobile subsribers globally, but is at 22 dollars when measured against the unique user count of 3.4 billion unique mobile phone users at the end of the year 2009.
The mobile data portion of total mobile revenues keeps growing and is now at 24% of all mobile service revenues. The proportion of 3G continues growing and deliver 325 billion dollars, and also, the proportion of the Developing World delivering revenues to the total industry keeps growing, where today a third of all mobile telecoms service revenues are earned in Africa, Latin America, the Middle East, and the less-developed parts of Asia such as India, China and Indonesia. It is a good business to be in, one that grows even when the economy is experiencing its biggest downturn in a lifetime. If you do not have a mobile strategy - isn't it time to get one now? And for those who want to understand the mobile industry, remember that I have a free mobile industry "Thought Piece" which in just two fact-filled pages, summarizes the mobile telecoms industry size. You'll get it if you write to me at tomi (at) tomiahonen (dot) com.
UPDATE Feb 10, 2010 - The TomiAhonen Almanac has now been released, it has 180 pages, 84 charts and tables (13 more than the 2009 edition) with sample stats, first opinions and ordering info at this story TomiAhonen Almanac 2010 Released.
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