Mobile Data Revenue Set to Exceed Mobile voice by 2017 but How are Operators Providing More Value to Subscribers?

IDC’s recent report, Mobile Service Tracker 2H 2013, forecasts that revenues for mobile data services in Malaysia will exceed mobile voice revenue in 2017 as we move towards becoming a fully connected nation. This is an emerging global trend that began in 2012 when Japan was the first country to see mobile data generate more revenue than mobile voice. At the end of 2013, the United States became the seventh country to cross this milestone.

In Malaysia, IDC expects total revenue from mobile services to reach RM27.6 billion by 2018; and while total revenues will grow at a Compound Annual Growth Rate (CAGR) of 2.6%, mobile data revenue will grow at more than three times that rate, at a CAGR of 8.5%. Right now, 57% of Malaysian mobile subscribers are also mobile data users but as smart devices become more affordable and mobile operators roll out more competitive data plans, IDC expects that by 2018, 89% of Malaysian mobile subscribers will also use mobile data.

Predictions like this are indicators of the rapidly evolving consumption patterns of Malaysian mobile users. If Malaysian telcos are to remain competitive and in tune with these changing times then they must innovate their business strategies beyond the traditional pay-per-use models we see today. At the same time operators need to leverage on each other’s strengths to improve on the quality of mobile data services in the country.

“Mobile operators need to be proactive to the market trend by leveraging emerging technologies such as Internet of Things (IoT), Big Data, Social and Cloud, in order to continue to grow and stay competitive. Mobile operators may also need to revisit their spectrum strategy in order to maximize network capacity and enhance user experience,” says Alfie Amir, Research Manager, Telecommunications, IDC Malaysia.

In addition to the forecast growth in the number of mobile data users in Malaysia, IDC has identified media content and 4G LTE services as further opportunities to grow mobile data revenue in the next five years.

Social media and Over-The-Top (OTT) services— video on demand, streaming music and other services provided over the Internet rather than through a mobile operator’s own managed network — together with the growing affordability of smart devices are driving the demand for mobile data services. In addition to providing higher data packages and greater bandwidth, IDC suggests that mobile operators explore revenue-sharing partnerships with OTT providers.

The higher speed and lower latency of 4G LTE services will play a key factor in enhancing the experiences of mobile data users. IDC predicts that LTE subscribers in Malaysia will grow from 265,000 in 2013 to 7.6 million in 2018, and evidence from more developed markets such as Japan and South Korea shows that LTE subscribers have higher average revenue per user (ARPU) than 3G subscribers due to the higher data usage.

With mobile data usage set to boom are operators providing good value for your money or are they charging way too much for data? And do you think services in Malaysia are up to challenge of meeting our growing needs? Tell us in the comments.