There’s No Miracle Like the Mobile Miracle

Michael Hedges May 18, 2011 Follow on Twitter

In just a decade the device of choice for media and communications delivery has coalesced around the mobile phone. Hundreds of millions of feature phones, smartphones and, by extension, tablets are out there and quickly outnumbering any other delivery device. For the foreseeable future, at least, content producers can forget everything else.

In the 48 countries designated by the United Nations (UN) as the least developed mobile phone penetration rose to nearly 30% by the end of 2010 from 1.2% in 2001, said a report by the International Telecommunications Union (ITU) for a Least Developed Countries (LCD) conference (May 13). “Mobile access has mushroomed, with cumulative annual growth rates over the past five years of 42.6% in LDCs compared to just 7.1% in developed countries,” said the ITU statement. It’s now safe to say that mobile devices, in all their variants, have taken over. Thank the creators of Star Trek and the legions of nerds who channeled it.

There is good news in this, and lots of it. Many content producers can now focus on a popular, readily available and reasonably inexpensive delivery device. Media-specific delivery devices are a thing of the past.

Radio broadcasters have particular reason to rejoice. Since 2001 “nearly every single phone model from Nokia includes an FM radio, even at the low price end,” reported Nokia Mobile Phones Director of Communications Louise Ingram in an email. “Think about the importance of listening to the cricket in rural India or the soccer in Nigeria...and of course, listening to music is universal.”

“We can't give you a number of Nokia mobile phones sold with FM radios,” Ms Ingram continued, “but it would easily be in the many hundreds of millions. To give you a sense of scale, in recent years, Nokia has been selling between 350 and 400 million phones a year.” While Nokia has been the biggest seller of mobile phones in Western Europe, other manufacturers – LG, Samsung, et.al – offer the same feature. Nokia recently released a mobile phone featuring an FM radio under €34.

In another perspective on numbers, the average Western European household has about five radio receiving devices. If that average household is comprised of four people, odds are that the number of radio receiving devices is now closer to ten. It’s a whole new world.

Mobile telecoms are also rejoicing. They, of course, charge a subscription, normally, for access to their networks and putting a mobile device in the hand, figuratively, of everybody means more cash. In the most developed countries mobile telecoms are thrilled with revenue opportunities from smartphones (3G) and mobile internet (4G). More bandwidth used brings higher average revenue per user (ARPU).

Excited about mobile internet is European Commission Vice President for the Digital Agenda Neelie Kroes. “The Internet economy will be growing to 5.8 percent of GDP, or almost €800 billion, by 2014,” she observed (May 3) announcing a €600 billion, five-year mobile internet development and investment grant.  “But we are only at the beginning of the Internet era.”

Every company and entrepreneur wanting to stay on the right side of investors has a 3G or 4G project. No business plan gets out of the elevator with a venture capital firm without the words “smartphone application.” IT leaders, like Google, are throwing their considerable weight (money and brains) into every conceivable 3G and 4G application. Google continues to frustrate old media, driving them to lawsuit and, thereafter, drink. It’s most recent mobile application joins news search with location data for “news near you.”

Governments, too, are excited about the mobile internet miracle. The French government is looking for €2.5 billion from its 4G spectrum auction later this year. “France must not sell its frequencies at cut-price levels,” said Minister of Industry Eric Besson to Le Figaro (May 15).

Mobile internet (4G) is 230% more efficient – handles much more data and traffic – than 3G said a report released by UK media and telecom regulator OFCOM (May 16). The 4G standards of choice at LTE and Wimax, often referred to as WiFi on steroids. The miracle they bring is a bigger bang (bandwidth) than wired internet access. The OFCOM report also said the vastly improved 4G efficiency will not by itself keep up with demand.

With all the billions and billions, imagination and innovation comes intense competition. Inevitably it’s competition for the consumers’ money. Publishers’ paywalls are augmented by mobile apps, for fee of course. In the midst of the mobile miracle are the game-makers, from FarmVille to Playstation, all high-density mobile applications. Consumers have so many opportunities to pay and play.

Few alarm bells are sounding, save those kill-joys talking about brown-outs from network under-capacity. But they are few and far between, vaguely reminiscent of bubbles past. Consumers, one broadcasting executive noted in a private conversation, have only so much to spend on media, entertainment and communications. “Once you add up the internet subscription, mobile subscriptions, Hulu, Playstation and GPS applications,” he said, “you’re into the school fee budget or, maybe, food.”

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