Mobile wholesale to the rescue? - Europe

Due to market saturation, and declines in retail voice and SMS revenue growth, mobile network operators (MNOs) are increasingly focusing on the wholesale sector.

So much so in fact that new research from PBI Tarifica -- a provider of tariff information, analysis and consultancy services -- has forecast that 40 per cent of mobile operators' revenues from 2003 to 2007 will be derived from wholesale services.

The wholesale products that MNOs are selling to third parties include SMS, capacity for MVNOs, mobile backhaul, hosting, data services and W-LANs.

"Despite some reluctance and even resentment by MNOs in allowing third parties [especially MVNOs] to access their networks, most are now beginning to welcome the additional revenue stream that wholesale has to offer," says Nicola Ainsworth, practice director of PBI Tarifica.

Jason Chapman, senior analyst at Gartner, a research and telecoms consultancy, claims that the majority of European MNOs won't be able to let MVNOs onto their 2G networks due to capacity constraints. "They'll have to wait until their 3G networks are fully operational before they can do that," he says.

Not so, says PBI Tarifica: "Our findings indicate that this shouldn't be an issue," says Ainsworth, "as MNOs let other third-parties [such as SMS aggregators] onto their 2G networks."

Ainsworth is also keen to point out that every SMS third-party [including aggregators and providers, enhanced services providers and MVNOs] cannot guarantee that all messages will be delivered to customers. "In fact, MNOs can't either," she says. "This is a problem that everyone is trying to resolve and those who can make quick inroads in this regard, will be in the best position to succeed in SMS wholesale."

She also adds that the emergence of premium SMS and MMS has increased the need for mobile operators to partner with content and application providers as it is the most cost-effective means for them to provide compelling content and applications to their end-users.

PBI Tarifica interviewed 29 companies for its mobile wholesale research: 12 MNOs, three MVNOs, nine SMS aggregators/providers, two mobile virtual network enablers (MVNEs), two mobile transit operators and one SMS systems integrator.

COPYRIGHT 2002 Horizon House Publications, Inc.
COPYRIGHT 2003 Gale Group