Cellular phone ads to provide new revenue stream
MACTAN/CEBU, Philippines — As more people use third-generation (3G) phones and as soon as mobile phone operators can provide rich media, advertising via mobile phones is expected to kick in and provide a new revenue stream for telecommunication companies.
Mobile advertising has been touted as the next killer application in the mobile industry. In the Philippines, this is still in the "elementary stage" because advertisements are currently sent only through the short messaging and multimedia messaging services, said Danilo J. Mojica II, head of Smart Communications, Inc. wireless consumer division.
But he is confident this will change soon, citing the increasing use of advanced mobile phones that are capable of receiving rich media, or information that consists of a combination of graphics, audio, video and animation, which is more storage and bandwidth intensive than ordinary text.
There are currently three million 3G phone users and about eight million people using GPRS phones in the country.
Once advertisements are shown on mobile phones the way commercials are run on television, mobile advertising will start to kick in, Mr. Mojica said.
"The tipping point is going to come within the next 12 to 18 months," he said on the sidelines of the 4th Asian Carriers’ Conference here.
"Tipping point" refers to the critical point in an evolving situation that leads to an irreversible development.
Smart subsidiary Connectivity Unlimited Resource Enterprise, Inc. (CURE) recently launched mobile, the first advertisement-funded mobile phone service in the Philippines and in Asia.
The system allows subscribers to text, call and surf the Internet as well as get free load and freebies or discounts from advertisers.
Mr. Mojica said four of the biggest advertisers in the country have committed to allot a budget for mobile advertising next year. These are Nestlé Philippines, Procter & Gamble, Unilever and Pepsi.
He declined to reveal the number of mobile subscribers who have started receiving advertisements on their handsets. CURE, however, has stopped taking in new subscribers pending the integration of its systems and equipment into Smart’s network.
mobile will be on stream as soon as the integration is completed late this year or early next year, Mr. Mojica added.
A similar advertisement-funded mobile phone service is also offered in Europe to attract the teenagers and students, said Claire Paponneau, executive vice- president of France Telecom Group.
She urged the over 500 delegates to the conference to reconsider their business models and look at mobile advertising and other new revenue streams that may be created as the telecommunication industry moves to an all-IP (Internet protocol) network, which allows fast access to voice, data and video services over core and access networks.
In Orange, the key brand of France Telecom, Ms. Paponneau said revenues from mobile entertainment, mobile sports television and video-on-demand comprised 6% of their total revenues last year and are expected to increase to 15% of the total this year.
Worldwide, Mr. Mojica said mobile advertising is seen to generate around 5% of telecommunication revenues by 2011. Through mobile advertising, the advertiser gains access to direct marketing and feedback. For the consumer, this frees up disposable income to purchase more goods and services.
Some 520 delegates from 150 companies and 41 countries participated in the 4th Asian Carriers’ Conference organized by the Philippine Long Distance Telephone Co. and its subsidiary Smart.
Aside from fixed carriers and mobile operators, the conference also gathered voice-over-Internet protocol (VoIP) and alternative service providers, submarine cable operators, vendors and suppliers. — Marites S. Villamor, BusinessWorld
Mobile advertising has been touted as the next killer application in the mobile industry. In the Philippines, this is still in the "elementary stage" because advertisements are currently sent only through the short messaging and multimedia messaging services, said Danilo J. Mojica II, head of Smart Communications, Inc. wireless consumer division.
But he is confident this will change soon, citing the increasing use of advanced mobile phones that are capable of receiving rich media, or information that consists of a combination of graphics, audio, video and animation, which is more storage and bandwidth intensive than ordinary text.
There are currently three million 3G phone users and about eight million people using GPRS phones in the country.
Once advertisements are shown on mobile phones the way commercials are run on television, mobile advertising will start to kick in, Mr. Mojica said.
"The tipping point is going to come within the next 12 to 18 months," he said on the sidelines of the 4th Asian Carriers’ Conference here.
"Tipping point" refers to the critical point in an evolving situation that leads to an irreversible development.
Smart subsidiary Connectivity Unlimited Resource Enterprise, Inc. (CURE) recently launched mobile, the first advertisement-funded mobile phone service in the Philippines and in Asia.
The system allows subscribers to text, call and surf the Internet as well as get free load and freebies or discounts from advertisers.
Mr. Mojica said four of the biggest advertisers in the country have committed to allot a budget for mobile advertising next year. These are Nestlé Philippines, Procter & Gamble, Unilever and Pepsi.
He declined to reveal the number of mobile subscribers who have started receiving advertisements on their handsets. CURE, however, has stopped taking in new subscribers pending the integration of its systems and equipment into Smart’s network.
mobile will be on stream as soon as the integration is completed late this year or early next year, Mr. Mojica added.
A similar advertisement-funded mobile phone service is also offered in Europe to attract the teenagers and students, said Claire Paponneau, executive vice- president of France Telecom Group.
She urged the over 500 delegates to the conference to reconsider their business models and look at mobile advertising and other new revenue streams that may be created as the telecommunication industry moves to an all-IP (Internet protocol) network, which allows fast access to voice, data and video services over core and access networks.
In Orange, the key brand of France Telecom, Ms. Paponneau said revenues from mobile entertainment, mobile sports television and video-on-demand comprised 6% of their total revenues last year and are expected to increase to 15% of the total this year.
Worldwide, Mr. Mojica said mobile advertising is seen to generate around 5% of telecommunication revenues by 2011. Through mobile advertising, the advertiser gains access to direct marketing and feedback. For the consumer, this frees up disposable income to purchase more goods and services.
Some 520 delegates from 150 companies and 41 countries participated in the 4th Asian Carriers’ Conference organized by the Philippine Long Distance Telephone Co. and its subsidiary Smart.
Aside from fixed carriers and mobile operators, the conference also gathered voice-over-Internet protocol (VoIP) and alternative service providers, submarine cable operators, vendors and suppliers. — Marites S. Villamor, BusinessWorld
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