Barcelona: The mobile phone industry buzzed with talk of the “next billion” and closer ties with the entertainment business last week as more than 1,000 companies gathered here for one of the biggest telecom trade shows. The “next billion” refers to the next billion handset sales that the giants in the sector expect to come from emerging markets such as India and China.
Closer links, or “convergence” as insiders call it, between telecom groups and entertainment companies are expected to result in more products being made available over the phone.
Supplying games, video, television, music and Internet services from eBay to MySpace are all part of a new strategy to increase revenues per user for telecom groups and provide a new outlet for the entertainment industry.
“We’re ready to collaborate to transform this potential into reality,” declared the CEO of Warner Music at the 3GSM trade show, Edgar Bronfman.
Yahoo vice-president Marco Boerries said the mobile phone was the company’s “top priority” and the chief of Vodafone, Arun Sarin, called for closer links between the phone and fun industries.
“We need to move together, whether it’s Yahoo, Google or Disney, because they’re all coming to our space,” said Sarin, CEO of the world’s biggest mobile phone group.
All agreed that there was still work to do to realise the vision of the mobile phone as a device for entertainment as well as for phoning, emailing and instant messaging.
“Only 8.5% of mobile users use their mobile to buy music, and there are three reasons for that: it’s expensive, it’s complicated and it’s slow,” said Bronfman.
Nick Lane, an analyst for telecoms consultancy Informa, underlined that the industry’s enthusiasm for offering new content had yet to infect the general public.
“The networks are improving and you’ll finally have (high-speed) broadband Internet on mobile. What’s more, handset functionality is improving,” he said. “But the problem remains the user interface and until that is simplified then consumers won’t find the content.”
The user interface is the system consumers use to navigate to find the services they desire, which at present is often clunky and unclear.
Many now buy ringtones because of their obvious utility, but would they choose their mobile phones to watch television, play games and surf the Internet?
Despite a hailstorm of jargon and new acronyms for the latest technology, the persistent use of the expression “the next billion” stood out at this year’s conference.
With mobile phone markets nearly saturated in the developed world, network operators and handset manufacturers are turning their attention to the fertile ground of emerging countries. Making affordable phones and targeting consumers with smaller budgets have clearly become priorities.
“There are between 2.5 and 2.8 billion people who have a mobile phone: the next billion will come from the high-growth market,” said the strategy director for Motorola, David Taylor, referring to Asia, Africa and the Middle East.
The US handset manufacturer won the GSM Association award for best ultra low-cost phone with its “Motofone” model, a sub-$30 handset for the developing world.
While China was the talk of Barcelona at the 3GSM conference in 2006, India stole the show this year. Vodafone agreed to pay $11.1 billion for Indian operator Hutchinson Essar in the runup to the event, putting the country firmly in the limelight.