New markets boost mobile industry

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BARCELONA, Spain -- Mobile phone manufacturers have gathered in Barcelona for the world's top wireless trade show, 3GSM, with the industry buoyed by fast growing developing market sales and the growing popularity of mobile Internet.

"The big story for the industry in 2007 is the continued growth of the global mobile population," Mark Newman, chief research officer at market research group Informa, told Reuters. "The vast majority of revenue growth is coming out of developing markets."

Newman forecasts 480 million additional mobile phone users in 2007, taking the global total to more than three billion, with four out of every five new subscribers in a developing market.

The challenge is very different in Europe, where mobile voice revenues have already flattened despite an increase in the number of minutes called, with some analysts predicting significant price declines for users from the current 10 (£0.13) to 15 euro cents cost per minute. U.S. consumers already pay less than 10 dollar cents.

But browsing the Internet and checking e-mail from mobile phones is becoming increasingly popular, with Vodafone reporting a 40 percent rise in data traffic in the fourth quarter.

Analysts predict the launch of a growing range of mobile services geared up for Internet use as the industry seeks to cash in on mobile browsing.

Informa estimates up to half of mobile subscribers worldwide will surf the Web from their phones by 2011, with revenues from mobile entertainment doubling to $38.12 billion.

Vodafone, with 200 million subscribers, last week said it would support online community MySpace and auction site eBay on its mobile phones.

Trend setting operators "3," owned by Hutchison Whampoa, showed the way by announcing unlimited Web access and support for major Internet applications such as Yahoo and Skype a few months ago.

"The theme of this year is the influence of the Internet on the mobile industry," Bengt Nordstrom, chief strategy officer at telecoms and technology consultancy inCode, told Reuters.

Television and GPS

The availability of mobile television is also likely to increase with Nokia, Samsung, LG and others expected to unveil new, medium-priced TV phones.

Strategy Analytics forecast that 20 million mobile broadcast TV phones, two percent of total sales, will be shipped worldwide in 2007.

Navigation on mobile phones will also demand attention as most phone makers will launch one or two devices enabled to navigate with a GPS satellite location chip inside.

"I would be very surprised if the total enabled phones does not increase to 50 million units in 2007," said Kanwar Chadha, founder of SiRF, the leading GPS chip supplier.

"2007 will be first year when we see GPS hit the mainstream mobile phone market," he said.

Operators plan rival service to iPhone

Meanwhile an alliance of all major music publishers and 23 mobile operators said on Monday they would launch a cellular music service to 690 million phone subscribers. (Full Story)

Initiated by British mobile music firm Omnifone, the music service will be launched by the second quarter, offering unlimited track downloads at 2.99 euros per week including data traffic charges.

"We expect to definitely get to the millions of subs (subscribers) by the end of this calendar year," said Omnifone founder Rob Lewis about the new service, called MusicStation.

Apple announced its entry into the mobile phone market last month when it unveiled the iPhone, incorporating an iPod digital music and video player. It will hit U.S. stores in the summer and will be available to consumers outside the United States later in the year.

MusicStation will be on offer in all major western European markets before iPhone is introduced, and the first operators to provide it will be Telenor in Norway and Vodafone partner network Vodacom in South Africa, Lewis said.

The special software to download tracks and play music will turn most phones into music-playing handsets, even models that were not designed as music phones, he said.

"It works on 75 percent of actual handsets today," he told Reuters, adding that the number of handsets able to provide the service would be several times the number of iPhones sold. Apple targets sales of 10 million iPhones in 2008.

Send money by mobile

In another announcement on Monday, mobile operators and banks joined forces to make it easier and cheaper for hundreds of millions of immigrants and migrant workers to send money home by using their mobile phones.

The aim is to reduce the transaction costs of sending small amounts of cash to just a few percent, from a current 24 percent for amounts as small as $50.

"Out of the 6.5 billion people on the planet, less than one billion have a bank account. The only way to sustainably serve these people is through mobile communications," said emerging markets projects manager Ben Soppitt of the GSM Association, which groups the world's mobile carriers.

A group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers will create a global system which could quadruple the size of the remittances market to more than $1 trillion by 2012.

Mobile operators are partnering with banks at a local or regional level. Payment card company MasterCard Inc. which has a 25,000 member-bank network will pilot a global hub that will link together national markets and the local payment systems run by mobile operators in partnership with those local banks.

The idea is that people can load cash on their mobile, and order it to be sent to a mobile phone number in another country, where the recipient receives a message that money has arrived, making it as easy as sending a text message.

"We believe that this coming together of the mobile and banking industry is a giant leap in mobile commerce," said Sunil Bharti Mittal, chairman and managing director of fast-growing Indian operator Bharti Airtel.

"It will revolutionize the money transfer industry with its advantages, such as reach, ease of use, and lower transaction costs and provide immense benefits to people in developing nations such as India," he added.

India is both the world's fastest growing mobile services market and the biggest recipient of overseas remittances in the world, accounting for around 10 percent of the world market.

Reuters contributed to this report.

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