The New Era of Mobile Usage Will Be Big Business, and Operators Are Set to Profit, IDC Says

LONDON – JUNE 18, 2001 – Despite recent bad press, mobile data services and applications are on the verge of major launches across Europe. The growth in mobile Internet applications and content is silencing the initial criticism about the technology itself and the cost of the licenses – the true test of the success of this market is the availability and usage of mobile Internet services – and in some cases, they are here already. According to IDC, mobile application revenues (from traffic, advertising, sponsorship, and subscription) are set to increase from $3.3 billion in 2001 to $44.8 billion by 2005.


"Many mobile operators are concerned that their investments in the Universal Mobile Telecommunications System (UMTS) licenses are weighing too heavily on their balance sheets," said Tim Sheedy, research manager of IDC’s European Wireless and Mobile Communications research. "Even operators who do not have a high license fee will still have to spend many hundreds of millions of dollars – possibly even billions – to roll out their 3G network." Operators must develop, or provide, third-party mobile applications that actually make use of these networks. These won't necessarily have to be broadband applications, as General Packet Radio Service (GPRS) will answer many of the needs of the consumer when it comes to mobile data applications.

Mobile Applications

Mobile applications will include the following:

· Intranet access, Internet browsing, vertical applications, and email access (laptop/PDA)

· Internet access and email access (mobile phone)

· Mobile office, banking/finance, information services, instant messaging, and remote diagnostics

· Games, shopping, music, video, multimedia messaging, and gambling

IDC believes no one killer application exists, but several. "The smorgasbord approach will be the most successful model for mobile operators and mobile portal providers," Sheedy said. "For example, a parking application may be successful in London or Paris but might not be so successful in smaller cities or towns where parking isn't as much of an issue. Users must be given a choice of many different applications, and they will, to an extent, choose the ones that suit them the most."

According to IDC, location, commerce, personalization for the consumer environment, and workflow and business opportunity for the corporate environment will be critical factors in the success of these applications. "Mobile operators need to focus more of their energies into finding out which mobile applications businesses and consumers are interested in and then develop these applications or partner with content developers or application providers who can actually provide the solution to their users," Sheedy concluded.

Mobile Data Services and Applications in Western Europe: Forecast and Analysis, 2000-2005 (IDC #HW02H) analyzes the market for mobile data services and applications in Western Europe. Forecasts and analysis of mobile subscribers, SMS, mobile data services, mobile browser (such as WAP), and mobile Internet applications are provided. Revenue analysis has been split between the operators and the content and applications providers. Additional information is provided regarding drivers and inhibitors of these services and applications and where the opportunities and challenges lie for the different players in the market. To purchase this report, contact Chad Eaton at 1-800-343-4952, extension 6972, or at

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.


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