Mobile phone 'personalisation' now is more than just physical changes. It reflects the way mobile services are delivered and how users interact with online portals. IDC Asia-Pacific's senior research manager, mobile and wireless technologies/services research group Alex Chau explains.

The rise of a new class of high-end smartphones is key driver for the focus on personalisation. The iPhone, the Blackberry, and devices with Symbian, Windows Mobile and Android operating systems, all have rooms to install thousands of applications from content providers through channels such as application stores.

Realising the potential of this new market, handset vendors such as RIM, Apple, Nokia and Sony Ericsson have created their application portals or app stores.

These portals serve as a platform for app developers to sell their products and give users access to validate their handsets' apps.

Besides the exception of the download bandwidth, most of these apps leave mobile operators out in the cold in revenue share.

Challenges and opportunities

Based on IDC's Asia-Pacific research of the mobile voice and multimedia services markets, mobile music, mobile e-mail, Internet browsing, video streaming and mobile TV are the main contributors of multimedia revenue through 2013.

Other multimedia services including social networking and instant messaging, mobile advertising, and mobile commerce will also see robust growth in this period.

IDC projects the total multimedia services profit will see a healthy compound annual growth rate (CAGR) of 24 per cent to reach US$4.9 billion (RM17.24 billion) over the next five years.

One of the main challenges mobile operators will face with the eruption of demand in multimedia services is a faster growth in bandwidth needs compared to subscriber growth.

The presence of cheaper multimedia handsets means a larger mobile user base will want to explore multimedia services, and the emergence of apps stores are putting the pressure on mobile operators to develop new revenue streams for themselves.

Forward thinking operators are now revisiting their 'personalisation' offerings to balance the challenges brought by the new high-performing multimedia devices and its supporting app stores.

IDC believes that personalisation, as it greatly up customer loyalty, will buy time for mobile operators to upgrade their radio access networks and core networks to handle future influx of traffic demands.

The economic downturn has also highlighted the need for mobile operators to invest in IT systems that will improve customer retention through more personalised solutions for data mining the large usage data gathered through daily operations.

Across Asia-Pacific (excluding Japan), the growth in multimedia service revenue as a percentage of total non-voice revenue is growing in line with total non-voice revenue.

SMS is still king in most 2G markets. While 3G operators are struggling to find the right balance of new value-added services and bandwidth demands, multimedia has always been looked as a way to drive data revenue up.

Mobile operators have also come to know that they have been underutilising their customer databases. Now, with a number of solutions ready to track customer usage patterns, URL visits, traffic news, favourites, and even ads viewed, operators are zeroing in on these and are starting to offer customised solutions for customers that focus on individual's interest.

Looking ahead

Another consumer trend driving the renewed interest in personalisation is the 'always on' option. Combined with the concept of session management, it will be prevalent in long-term evolution-based systems in the future.

Increase in bandwidth at the access point means more users can be served, while the upgraded core allows for apps that require real-time or small latency.

Mobile instant messages and social networking services have continued their success in the fixed services world.

Although location-based services have been around for several years now, its performance, in accuracy, has been less than desirable. This issue is solved by the growing number of handsets entering the market with built-in GPS.

Mapping and navigation are fast being adopted. Taking benefit of this newfound potential, global mobile operators have launched apps that employ location-based capabilities such as local searches and friend finders.

The recent trend of payments through the mobile phone, which has been deployed in Japan for years, is expected to catch on in other developed markets including the US and Asia-Pacific (excluding Japan). This weighs in the hands of the mobile operator who can quickly provide a secure and reliable mobile payment ecosystem.

The understanding of customer usage patterns is an existing advantage mobile operators have over the apps stores. This is the opportunity for them to seize market share and prevent critical losses in the value-added service data revenue streams.