50% to 60% of New Prepaid Wireless Users Will Never Go Back to Post-Paid

Prepaid wireless clearly is growing. In the first quarter, for example, about 61 percent of the new net customers T-Mobile added were prepaid accounts. In the fourth quarter of 2008, T-Mobile added 57 percent prepaid accounts. In the first quarter of 2008 T-Mobile added 25 percent prepaid customers.

So the big question is what those customers might do once the recession is over and there is less need to watch spending on mobile and other communications and entertainment services.

Wireless analyst Chetan Sharma thinks it is possible that "it is quite likely that 50 percent to 60 percent of such consumers don’t go back to postpaid."

For major wireless providers, this will mean a decline in average revenue per user. For prepaid providers, the trend will mean continued opportunities to take market share from postpaid providers.

The other trend is that although prepaid traditionaly has been viewed as a niche segment for lower-income customers, that could be changing. Lots of customers who traditionally have used postpaid plans might find they can get along quite nicely using prepaid.

Over time, even smart phone customers will find they are able to buy prepaid service that allows them to use higher performance, later model devices with prepaid plans.

Mobile Streaming Video Grows 58% Last Quarter

Worldwide mobile data bandwidth usage has grown 30 percent during the second quarter of 2009, says Allot Communications. Asia leads the growth with 36 percent; Europe posted 28 percent growth and the Americas 25 percent.

Heavy data users do not distinguish between their fixed and their mobile networks and seem to expect the same service from the Internet, irrespective of their access method, the report says.

That is going to be a problem, for the same reason a small percentage of heavy users create performance issues for all other users, one might reasonably conclude. The other issue is that the fastest-growing traffic type is streaming video, which grew 58 percent during the quarter. Since streaming video requires 100 times the bandwidth of a voice call, you can imagine what the problem is.

The other issue is that mobile traffic is not evenly distributed: some locations get dramatically more demand than others. Peer-to-peer traffic, for example, accounts for 42 percent of bandwidth utilization in the busiest cells on the network, but only 21 percent in the average cell.

Since mobile licenses are awarded in ways that mean usable bandiwidth in any one location is limited, fancier engineering, higher network cost and more-sophisticated traffic engineering are required at some cell sites, though others might manage just fine.

Internet Rivals TV as Top Leisure Pursuit

The Internet now rivals TV as a favorite leisure activity, say researchers at Frank Magid Associates (click image for larger view). And computer or game consoles are not far behind.

Broadband Adoption is Not Just about Availability

Some observers think broadband adoption is primarily a matter of availability. It is important, but it is not the only important factor.

Even if every home and business in every OECD country were wired with a broadband connection, the United States "per capita" rank would actually fall to 20th, because of differences in the size of households in each of the countries.

In other words, "America would be 100 percent broadband saturated and yet our standing would plummet because the OECD ranks on a per capita basis rather than per household," says Federal Communications Commission Commissioner Robert McDowell.

In Spain, for example, 28 percent of people flatly say they "do not want" broadband. About 15 percent of homes do not own a computer.

About 13 percent of surveyed consumers say they do not find the Internet "useful."

S0me 12 percent say they do not have time to use the Internet and 10 percent say they do not know what the Internet is. Only four percent of non-users say it is "too expensive."

So the main reason non-users are not buying broadband access services is that they do not see the Internet's usefulness and value.

Questions about Zer01, Buzzirk

Nancy Gohring , a reporter fror IDG News Service, has raised some uncomfortable and so far unanswered questions about Zer01, the new prepaid mobile service launched by United Technologies Group and sold by channel partners including Buzzirk. The service promises unlimited voice and data for $70 a month, with no contract.

But Gohring says "what little information is available about the services is vague, technically inconsistent, and doesn't match up with public records."

And that's the least of the issues. Anybody thinking about becoming a distributor probably should read this as part of their due diligence. It's a heck of a piece of reporting and research.

http://www.networkworld.com/news/2009/072009-zer01s-mobile-offer-may-be.html?page=1

Ad Market Recovery in 2010?

Perhaps we all are anticipating too much "normalcy" from the current recession and recovery. But PricewaterhouseCoopers (PwC) expects a 2010 recovery.

PwC says worldwide advertising spending will reach $421 billion 2009.

The bad news is that figure is down 12.1% from 2008, which saw $479 billion in spending.

Fortunately, PwC expects the online and mobile (which it treats as one category) and video game ad spaces to rebound in 2010 with five-year compound annual growth rates of 7.7% and 13.8%, respectively.

PwC expects all global media markets to see a rise in spending by 2012. Recovery will not be evenly spread around the world, however. Total ad spending in North America compounded annually will decrease by 1.6% from 2009 to 2013.

Online, mobile and video game advertising will see 6.4% and 13% compound annual growth rates, respectively, over the five-year period.

Online and mobile advertising spending, down in 2009, will rebound in 2010. North America will see overall advertising spending rise in 2011.

Ninety-four percent of North American advertising spending will come from the United States.

No Inflection Point for Interactive Media, Yet

Nothing is going to replace search advertising as the top interactive category, just as nothing appears able to dislodge display advertising, between now and 2014 or so.

And though interactive advertising is growing, it will not displace offline alternatives, either.

By 2014, all interactive channels together will account for about 21 percent of total ad spend.

That is not to say greater changes are unlikely. One of the enduring lessons of "disruptive" change is that there is a sometimes long gestation period before an inflection point is hit. Then the change goes non-linear and vast changes can occur very quickly.

Nobody knows yet if that is what lies ahead for advertising. But it bears watching, as 2009 seems to have marked something of a watershed for print media, for example.