The Strategis Group predicts despite the industry’s hardships to date, the commercial mobile data business can expect a rash of subscribers and revenues in the immediate years to come.
In a report titled, “U.S. Mobile Data Marketplace: 1997,” the Washington-based consulting company predicts there will be more than 10 million mobile data subscribers and annual service revenues in excess of $1.7 billion by 2001, with subscriber levels increasing to 17 million users by 2002.
The reserach firm named wireless e-mail service the powerful wind that will lift the industry’s sails to reach these figures. More than 80 percent of the 10 million anticipated subscribers will use e-mail or a two-way messaging capability, the report read. Analysts point to the already near-ubiquitous use of e-mail on corporate networks today as the reason for such bullish views on its wireless incarnation.
“That’s the primary driver,” said Steve Virostek, director of wireless data research at The Strategis Group. “It takes advantage of a behavior that has infiltrated the work force today. It’s not asking them to learn a new skill.”
Once the business world is dragged into the world of wireless data on the coattails of wireless e-mail, it may begin eyeing other mobile data services.
“The growth of the Internet and e-mail is the saving grace for the mobile data marketplace,” said Elliott Hamilton, vice president of the Strategis Group. “Smart mobile data carriers will hitch their wagons to the Internet and ride the Internet and e-mail growth curve.”
These forecasts primarily focus on the use of wireless e-mail used with smartphones, or digital voice phones with short message service capabilities, as well as certain two-way messaging devices-including pagers, portable PCs and wireless organizers.
“The thrust is bundling data with a voice service,” Virostek said, although the study indicates that potential customers have not chosen one specific device on which they prefer to send and receive messages. The report stated 35 percent of potential customers said they preferred a cellular or personal communications services phone with SMS capabilities, 25 percent fingered portable PCs, 21 percent chose pagers and the remaining 19 percent gave the nod to wireless organizers.
Exactly which type of network will deliver wireless e-mail to the portable PCs and wireless organizers was not mentioned, but it is likely that either paging networks or dedicated mobile data networks will compete for this honor.
Currently, about 60 percent of today’s wireless data customers use the cellular network to send and receive data, and The Strategis Group expects more wireless modems to be developed for data transmission via cellular networks.
However, though cellular data customers comprise the majority of wireless data customers, they contribute the least in terms of revenues because they use the service so infrequently. As such, mobile satellite providers and dedicated mobile data network operators, which command less that 25 percent of wireless data subscribers, rake in almost 70 percent of the industry’s service revenues.
Yet, those who use mobile data as a stand-alone service must cope with very expensive devices transmitting over networks that are currently undergoing changes, Virostek said. As such, those networks are unlikely to get near the subscriber numbers commanded by mobile phone and messaging providers.
These predictions for the future take root in the results of this past year. While final figures are not yet complete, the Strategis Group estimates that cellular carriers may have added 200,000 data subscribers to reach a year-end total of 1.2 million in 1997.
Of 150 telecommunications managers interviewed, 33 percent said they would likely buy a wireless data solution in the next year. Another 60 percent said they would do the same sometime during the next three years. Those who have no plans to purchase such solutions said they felt there was no need to do so and that service and equipment costs were too high, perceptions that have dogged the wireless data industry since its inception.
