Thursday, March 16, 2006

Cell providers hope to score off March Madness

With March Madness just getting started today, the Orlando Sentinel writes that "Cingular, Verizon and Sprint all hope to drive revenue growth by tempting cell-phone customers to spring for a variety of NCAA Tournament-related features, ranging from scores and game summaries to coaches' analyses and video highlights." Getting the content won't come cheap as the network operators will try to charge for as much as possible to drive ARPU.

Jeff Kagan said, "The bottom line is, customers like extra features, so the carriers are rushing to bring new features to the phone."

Linda Barrabee, at Yankee Group added, "Voice has been commoditized and the [customer] spend is not rising." According to Lewis Ward at IDC, "for the cellular industry as a whole, voice still rules, but data revenue grew from 6 percent of all revenue in 2004 to 8.5 percent last year and is expected to reach 12 percent this year." Yankee Group predicts "wireless data could account for more than 21 percent of revenue by 2009."

Charles Golvin at Forrester Research said, "The carriers have invested heavily in data networks, and need to leverage that investment. Plus, the NCAA Tournament is well-suited to mobile content. It's timely, enabling you to find out how your team fared, and it plays to a community dynamic of people in office pools."

The article then looks at the various efforts by Cingular, Sprint and Verizon to take advantage of interest in the NCAA basketball tournament.

Kagan concluded, "Broadband makes for new opportunities that go well beyond traditional voice. In fact, you don't even see voice much in ads now, but you do see users watching TV or movies."