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3G content will turn phone users into salespeople
And cut out the operators

By Jo Best

Published: Thursday 03 February 2005

With 3G finally up and running and paid-for mobile content slowly making its presence known on operators' balance sheets, the whole model could be set for a u-turn. By 2009, making money from mobile content will be about people power.

According to a new report from analyst house Informa Media and Telecoms, the market for mobile content will be worth $50.7bn as consumers start to turn themselves into resellers.

P2P distribution models are already starting to emerge in online music; with players like BT and Snocap working on similar services, analysts are predicting the model will make the jump to the mobile world.

Teenagers, for example, are one likely target of such a model, whereby they would earn rewards for every time a piece of content is purchased by a friend on their recommendation.

As well as adopting a new role as resellers, consumers will find operators luring them into buying content by offering cheap or free browsing to encourage users to check out their wares.

One area of natural wastage from the advent of 3G services will be the premium rate text message - where consumers buy a ringtone or similar by means of sending an SMS that costs them £3, for example.

Dan Winterbottom, mobile content analyst at Informa, said that premium text messages will lose out to the browse-and-buy model as more users start to connect over higher speed networks.

Although users may see their browsing bills dwindle, the mobile operators' revenues may go the same way. While operators have the muscle to claim a greater share of the revenue from content providers to make up for the traffic revenue shortfall, the status quo is unlikely to continue.

Currently, it's the operators that are making the money from content services. In future, Informa Media and Telecoms predicts, it will be the content providers holding the reins. The content owners will seek to shed controlling partnerships with the operators by focusing on selling their content through their own portals.

The report predicts that by 2009, nearly 30 per cent of revenues will go to operators, 19 per cent to other players and the rest - 51 per cent - to the mobile content providers.