Ascendant technologies - as well as price and market pressures - will force a transformation in the global mobile industry over the coming years, according to two research firms.
Organizations will increase both their business-to-employee and B2C spending over the next two years as they rise from the ashes of the global economic crisis, Gartner said.
The firm said10 key technologies will drive their spending, as well as their overall strategies and policies and by extension the shape of the industry.
One such technology is mobile web browsing, Gartner said - by 2011 over 85% of handsets shipped globally will have some form of integrated web browser. And the technology will be a key part of nearly every organization's B2C portfolio.
Standard options
Likewise, by the end of 2011, over 75% of phones shipped in mature markets will include GPS.
For more powerful devices, such as corporate laptops, embedded cellular networking will become a standard feature. Embedded networking will also enable new categories of connected devices such as e-books and media players.
On the applications end, the most influential technologies will be app stores and platform-independent development tools, as well as device-independent tools that can enable CIOs to deliver multiplatform applications while minimizing security risks.
But for the prepaid mobile market, technologies aren't the only transformative pressures operators are grappling with. This segment is facing major challenges-pressures likely to force the first major strategic changes since the market first developed, according to a separate report from Strand Consult.
While the price difference between prepaid and postpaid offerings is marginal, the average prepaid customer now has significantly lower ARPU compared to subscribers, Strand said.
Ten overarching trends in the market are cumulatively reducing the margins on prepaid products, threatening to transform what was once a cash cow into a "nightmare," the research firm said.
These include the popularity of cheap SMS packages with huge numbers of messages included, tumbling data and international traffic tariffs and the growing practice of offering cheap or free on-net traffic.
At the same time churn rates are exploding, and consumers in developed markets are increasingly using SIM cards from multiple providers - as evidenced by penetration rates of over 120% in some countries.
The growing popularity of prepaid mobile broadband is also putting pressures on margins, Strand said.
Sales channels for prepaid products are also evolving, with the internet increasingly being used as a distribution medium for SIM cards and top-ups. This has had the effect of decreasing recharge costs in many countries.
As a result of these pressures and growing penetration, operators are abandoning the battle over new customers in favor of a fight to retain existing customers.
But with pricing the traditional means of competing for prepaid subscribers, many operators have lost faith in the charging model, Strand said. Instead they are fighting to entice their prepaid customers into subscription accounts.