Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
It's hard to see how the advantages this niche operator enjoyed through its narrow focus will be sustained as part of a much larger business like Virgin, which is hardly a niche operator and one which I suspect under the ownership of SingTel is likely to lose the 'cheeky irreverence' that characterises it and other Virgin businesses, notably Virgin Blue.
Then this week comes another report from KPMG, the results of a global survey of mobile phone users. It's message, to put it bluntly, is that if operators think they can make a motza out of a whole swag of new content services delivered to mobiles, they are dreaming. The demand is there for sure but, conditioned by the Internet, people expect the content to be free. So advertising and sponsorship must be the source of revenue.
The third report, from new Australian research company, Market Clarity, observes that with the market now saturated (Market Clarity says there are more cellphone services in Australia than people over the age of six) growth can only come from adding value and securing revenue for that added value.
Market Clarity CEO, Shara Evans, said this is already proving a difficult task, with consumers slow to adopt high-return services such as mobile data and 3G offerings. "3G services show by far the highest average revenue per user in the mobile market. But so far, with about 750,000 3G services in operation at December 2005, the 3G space has yet to experience serious competition....As carriers try to convince users to convert from 2G to 3G services, we expect bundle competition in the 3G market to follow similar patterns to those already seen in the 2G market.
Today, Evans said, 3G services enjoy average revenue per user of over $80 per month, but in a more competitive market this is likely to decline towards the industry-wide average of just over $57 per month.
In other words, Optus, don't expect that perfect storm to blow itself out anytime soon. Or, as it was St Patrick's Day: the profit and growth rates of the past might prove as elusive as that pot of leprechaun gold at the end of the rainbow.
David Bass
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