The European mobile commerce market will be worth over $50 billion by 2006, but only if the wireless industry acts quickly to promote wider content and service creation from third parties, Yankee Group Inc. predicted in a report released Friday.
The report, “Mobile Commerce in Europe: Premium content remains the priority,” says the term m-commerce is often used too loosely, to cover any mobile data application. This has led to confusion in the market, with industry players unsure of what true m-commerce services are and what their potential is, the company said in a statement.
The Yankee Group has based much of its research on the Japanese market, where mobile services are more advanced than in Europe, said director of wireless Research Declan Lonergan.
The survey identifies three categories of m-commerce: premium content, remote payment and local, point of sale, applications.
Of these, premium content represents the largest and most immediate opportunity and will generate over 75 per cent of all m-commerce transaction revenue by 2006, said the survey.
However, this is dependent on mobile operators realizing the role of third-party applications and content companies in providing the necessary content, and allowing them to make a suitable profit on their products, said Lonergan.
“Premium services” include any services where the customer is paying over and above the standard SMS (short message service) cost, said Lonergan. “It can be as simple as downloading icons and ring tones and paying for them with the phone itself, as opposed to the current method where they call a premium phone number.” Beyond that, it could cover entertainment, stock quotes, horoscopes or any other information sent to a mobile phone.
That third parties rather than the operators themselves should ideally develop information, said Lonergan. That is the method that has worked best in Japan, he said.
Operators should work as a billing company, allowing customers to access the content services and taking a low percentage of the value of each transaction, said Lonergan. To make the market attractive to content providers, the operators in Japan only take an average of 9 percent of the value of each transaction, and a similar model should be used here, said Lonergan.