Telecommunication companies are worried about current developments in the world of the mobile internet. There is a change in user habits and behavior, the popularity of using multiple social networks and applications that stream video and audio is growing. The difference between the traditional use of mobile internet (e-mail, chat, and sporadic visits to different sites) and the social network use of mobile internet is that the latter is ongoing and constant. Social networks become, with each new cycle of innovation, environments for constant exchange of information, and with ever larger data transmission, whether in the form of applications, videos, pictures or other files.
Miguel Dorneles, Manager of Products and Operations at FOX Latin American Channels, tells us that 2009 consolidated "live blogging" activities and established once and for all a term that is becoming increasingly popular (even among non-digital mainstream players): the so-called "social media." For Dorneles, 2010 is the year of the socialization of the media, which in his own words means “we’re becoming part of a communication layer that once was one-way, almost dictatorial, that now begins to govern a world apparently more proactive and feedback-based”.
Fixed networks in the U.S. have been preparing themselves for this expansion of internet use for at least the last four years, but now the expansion in data use is also happening in the mobile networks. Mobile carrier AT&T experienced an increase in network traffic because of the overwhelming amount of data downloaded by iPhone users. Over the past three years, AT&T's data traffic increased 4932% due to data-heavy iPhone use. This is an increase of almost 50 times over what it was in the fourth quarter of 2006.
According to Andre Bodowski, a marketing manager based in New York and Sao Paulo, the “data use explosion is just beginning and it will not only affect AT&T, but other U.S., European and South American operators as new “Google” phones and new Blackberry models allow for ever greater expansion of video, audio and constant streaming of data to mobile phones”.
Mary Meeker, analyst at Morgan Stanley draws attention to the challenge of mobile internet and mobile social networking. Meeker said that 2009 was the year that mobile internet had gained momentum. To her there is an inflection point where a technology becomes popular, accessible and self-sustaining. In the case of mobile Internet, this inflection point occurs around 20% of the total of all mobile users. This mark of 20% has already been reached now for several years in Japan, and more recently in Western Europe and the USA.
Observing the dynamics of the market in Japan in light of significant penetration of 3G networks (currently around 90%), Meeker has observed a convergence point where important mobile platforms have become the main form of social networking. Today, access to social networking through mobile networks is three times larger than the access via fixed networks, which naturally puts a strain on the infrastructure of wireless networks, because people remain connected at all times and because of the fact that the size of the files exchanged is much larger than with regular mobile internet use.
Much still remains to be done to develop and increase mobile social networks. Phones have to allow easier typing and carriers have to introduce more features, like the possibility to capture and share full motion videos, for example, in order to make this a truly rich experience.
But what is clear is that mobile networks are every day more attached to the development of the Internet and applications that thrive in this environment and the use of these applications will grow despite questions on whether or not the business model will be profitable. The best proof is the phenomena of Twitter, Facebook and Youtube, where usage has grown exponentially even though their balance sheets do not necessarily follow the same trend. So to conclude, wireless companies need to be prepared to withstand this new mass use of the Social Networks and applications.
Edvaldo Acir is currently Head of Business Development at FOX Latin American Channels and works with digital media since 1998. He has a Master degree in progress at UNICAMP (research about mobile market) and a Post Graduation degree at ECA/USP in Advertising and Marketing (research about internet and mobile market). Contact: edvaldoacir [at] uol.com.br
