MBC will publish a new research report: Sponsored Data: Mobile’s Next Business Model, in March. Here is the report’s draft introduction. Email firstname.lastname@example.org for more details.
In developed markets, mobile data has become a must have service. Consumers are voracious mobile data users and willing to pay for it:
- Smartphone penetration will be greater than 50% of the entire population in 2015 in North America and every country in Western Europe with the exception of Portugal, Belgium, Austria and the Czech Republic, according to eMarketer .
- Mobile data traffic grew 63% in North America and 39% in Western Europe between year end 2013 and year end 2014, according to the latest Cisco VNI.
But there are dark clouds on the horizon. There is a convergence of market drivers that could derail consumer’s love affair with mobile data:
- Mobile data traffic will grow even faster over the next few years. Between 2014 and end of 2018, mobile data traffic in will increase 5X in North America and 7X in Western Europe.
- Consumer’s willingness to pay is limited. While mobile operators in the U.S. have recently reduced pricing for mobile data, mobile expenditures will most likely continue to represent over 2% of household income in 2015. How much more can most people afford?
- Mobile operator revenues for mobile data significantly lag traffic volume growth. According to a recent McKinsey study, while mobile data traffic has increased 40X from 2008 to 2013, the revenues associated with it have barely tripled. Can mobile operators sustain their current business models?
So consumer demand for mobile data is big and will get even bigger, but consumers may not be able to pay for much more, leaving mobile operators with a big problem. Mobile operators are going to have to deploy new business models, and Mark Beccue Consulting (MBC) believes the one that makes the most sense is sponsored data.
Sponsored data is simply this – an entity other than the end user pays for some portion of the end user’s mobile data use.
MBC believes sponsored data as a mobile business model is set for significant growth in 2015 and 2016 in the U.S. and Europe, with impact for a host of players, including online retailers, travel providers, search advertisers, media publishers, enterprise plays and b2c businesses. This report will aim to address the following:
- Identify and detail key market drivers and barriers for sponsored data
- Profile the key companies that will drive market change
- Outline sponsored data business strategies, use cases and revenue models
- Deliver three-year forecasts for sponsored data users, sponsored data revenues