Catch the next wave of mobile monetization

Guest Blog Submitted by Jeff Meek, Manager, Product Marketing, SP

Almost $1 trillion will be divided among mobile operators in the next few years. Are you fully prepared to take your share?

Growing numbers of mobile users and a fast-changing competitive environment: that’s the opportunity, and the challenge, for mobile operators today. With voice traffic declining and revenue being lost to over-the-top providers and Wi-Fi access networks, it’s up to you to bring to market compelling mobile services to capture new revenue – or risk watching your market share disappear.

Let’s look at the latest numbers and forecasts. According to the Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast, by 2020 there will be 5.5 billion mobile users around the world. That’s up from 4.8 billion in 2015. There will also be 11.6 billion connected mobile devices by 2020 – more than two per user. In 2015, mobile offload exceeded cellular traffic for the first time. Fifty-one percent of total mobile data traffic was offloaded through Wi-Fi or femtocell.

Cisco applied data from the Cisco VNI, as well as research by ABI Research, IDC, AMI-Partners, Gartner, and Frost & Sullivan, to create a tool that models the impact of these rapidly developing changes. The Cisco Monetization and Optimization Index (MOI) features revenue forecasts for five different service categories, and lets you explore opportunities to monetize specific service offerings.

A world connected

Overall, Cisco forecasts there will be 50 billion connections to the “internet of everything” by 2019, bringing $892 billion in new revenue from mobile, media and entertainment, cloud infrastructure and cloud services.

For the mobile market, the Cisco MOI features three mobile services from which you can expect to reap major revenue in the next few years. Together, these services will generate more than $506 billion in global revenues by 2019. Of the three, Machine-to-Machine (M2M) services is the most significant, comprising 87% of that revenue ($438.8 billion). Sponsored data is the next largest service, with 8% ($42.1 billion). And the last, targeted advertising, is forecast to claim 5% of market revenue by 2019 ($25.6 billion).

The cost to deliver these services cost-efficiently has been estimated at between $1.18 to $2.77 per GB. Based on different markets and regions, these mobile services could add $0.28 to $5.50 per month in incremental average revenue per user (ARPU) for mobile operators.

Building new partnerships

To offer these three types of mobile services, operators need a sophisticated mobile network infrastructure that includes a packet core with flexible integration of 2G, 3G, 4G/LTE, and Wi-Fi mobile connections across multivendor macrocell and small cell access networks. Virtualizing these capabilities gives mobile operators greater agility when it comes to creating and operating a wider range of services, while also optimizing their networks to deliver them.

M2M, sponsored data and targeted advertising services all benefit from partnerships forged between mobile operators and other industries. For example, an M2M platform may include automobile or home appliance manufacturers, public utilities, municipalities, or private property management companies. Sponsored data services may include content providers, such as movie or TV studios, internet music providers, and streaming video sites. Targeted advertising services could include an ecosystem of ad agencies, advertisers, media buying services, and point-of-sale kiosks.

Mobile monetization solutions are here, and if you can identify which work best for your customers, and how to deliver them cost-effectively, you will pull ahead of the competition and reap your share of the revenue.

Find out more

Familiarize yourself with the Cisco Monetization and Optimization Index. Take the time to understand its benefits and alter the inputs according to your market. Cisco can then deliver a more detailed analysis of your market, opportunities, and resources.

For more information, or for a more in-depth analysis of your market, opportunities and resources, visit cs.co/moi/.