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Dec 4

Mobile International Long Distance - The Last High Margin Frontier

According to a report from IDATE, “the world telecom services market was estimated at US$1,365 billion in 2008 - a 4.2% increase over the year before - and is expected to be worth over US$1,416 billion in 2009. With a total turnover estimated at US$742.2 billion in 2008, mobile services account for 54% of the telecom services market and single handedly deliver all of the sector's growth.”


In the highly competitive long distance termination market, with its diminishing margins and revenue, service providers need to look towards the mobile market.  The mobile market holds tremendous value as its pricing is eroding at a much slower pace than in the fixed line and voice over broadband (VoBB) markets.  Thankfully for next-generation networks, through the proliferation of extremely powerful and open smartphones, this can be achieved by loading special applications on these devices.  However, getting the application loaded is different than getting the application loaded and widely used so in order to be successful service provides must make sure their applications are as intuitive as possible and tightly integrated into the device as well as the habituated process of the user. 

Today's smartphones such as the Blackberry, Windows Mobile and the iPhone offer centralized, virtual over-the-air mobile stores where these applications can be purchased, often at no charge, and conveniently downloaded directly from the phone for immediate use after sign-up.  The benefit to subscribers is quickly apparent as the process is significantly easier than using calling cards, they can continue to use the phone as they normally do dialing from their phone's contact list, and they realize considerable savings over what they are currently being charged by their mobile carrier.  The benefit to the service provider is that they are now able to capture long distance termination revenue from mobile subscribers, well outside of their current network's footprint, and at higher margin than with their landline and broadband subscribers.

Industry research further shows that smartphones will capture about 20% of the mobile phone market by 2013 despite the struggling economy, according to a report recently released from In-Stat.   The report, titled “Smartphones: Heading to the Mainstream,” states that smartphones will see growth this year even though the cell phone market is looking at a rare downturn for 2009. The report found that nearly 33% of those surveyed planned to buy a smartphone when they upgrade their current phone. 


“Strong demand is being driven by device manufacturers leveraging open OS device to reinvent the mobile phone experience,” said Frank Dickson, VP of In-Stat's mobile Internet group, in a statement. “New and prospective smartphone buyers are drawn to new mobile applications, even though the median number of applications downloaded for all platforms, including the Apple iPhone, is relatively modest — below five applications per user for each platform.”


For the next-generation service provider offering a complete suite of telecom services that can capture the home, business and mobile markets translate into amazing opportunity with reduced customer churn, higher margin revenues and a growing and diversified subscriber base.