According to BCG's 'The Growth of the Global Mobile Internet Economy' report commissioned by Google, the biggest contributors to the mobile Internet revenue growth in the next few years will be applications, content and services. The demand for apps, digital content and digital services, said the report, will be driven by the strong growth in mobile commerce activities - both mobile shopping and mobile advertising.
The findings of the survey, which align to the 2015 strategies of mobile operators, many of whom have started expanding their presence into digital service verticals by providing digital content such as OTT video and mobile TV services, mobile music services and mobile libraries/bookstores along with mobile advertising services including sponsored data offers, show that the global mobile Internet will contribute significantly to the economies of both developed and developing regions. In its report, BCG said that the mobile Internet is already generating close to US$700 billion in revenues in 13 countries that make up 70% of the world GDP, an average of US$780 per adult and have resulted in the creation of 3 million jobs. BCG predicts revenues from this segment to increase by 23% by 2017, reaching US$1.55 trillion.
Amidst falling tariff rates from the commoditization of mobile data and the increasing competition between the various players within the ecosystem including the Mobile Virtual Network Operators (MVNOs), Over-the-Top (OTT) service providers and Wi-Fi service providers, mobile operators are making inroads into value-based pricing and customized services to create service/product differentiation as means to arrest the continuous fall in data rates. While expansion of their services to digital content offers and mobile commerce services enables mobile operators to hedge against the risk of reducing margins in their connectivity business, the ability to innovate their mobile data offers to meet the specific needs of premium subscribers by bundling value-added-services such as content bundles, location based services, multi-screen offers and consumer M2M services will enable mobile operators to push towards higher margins in selected market segments. Apps in particular are becoming the hottest selling digital content, and according to BCG, in 2013 alone, there were more than 100 billion downloads of apps by users with leading app-store operators paying developers more than $15 billion between June 2013 and July 2014.
BCG's research looked at how consumers in the 13 countries - Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, South Korea, Spain, the United Kingdom, and the United States - benefit from access to mobile Internet and said that users in these countries believe that they receive a surplus value (after paying for the services/devices) of $4,000 a year, or seven times what they spend on mobile data devices and access. The perceived surplus brings total consumer surplus in all 13 countries to $3.5 trillion a year, added BCG, with US and Chine leading the lot with surpluses of $827 billion and $680 billion respectively. According to BCG, large majorities of consumers surveyed said that they would forgo most offline media (the one exception is TV) before losing their mobile Internet access. Two-thirds or more would give up chocolate and alcohol while more than half are willing to forgo coffee and movies. A third are willing to give up their cars, and more than a quarter would abstain from sex, added BCG.
Dominic Field, a BCG partner and coauthor of the report
Competition throughout the mobile Internet ecosystem is driving innovation, growth, jobs, and a continually improving experience for consumers and businesses. Increasing mobile access everywhere is leading to new uses of the Internet—in fields from banking to education and from health care to the delivery of public services—further propelling growth. Policy makers can help keep the mobile Internet economy moving by pursuing proven policy goals that encourage continued improvement in these areas, as well as innovation, value creation, and consumer welfare and choice.
Paul Zwillenberg, a BCG partner and coauthor of the report
The growth of the mobile Internet economy is propelled by increasing affordability and accessibility, as well as by advances in technology and infrastructure. The rapid advent of more affordable phones—those costing $100 or less—will drive both greater penetration and new uses.
