Irish businesses spend US$1bn on mobile

10 Nov 2005

The Irish business market is now spending in excess of US$1bn a year on mobile services, an IDC research director visiting Dublin said this week. Some 20pc of all business users in the Irish market are responsible for generating more than 40pc of total mobile spend in Ireland.

Speaking at IDC’s third annual Mobility Conference in Dublin earlier this week Lars Vestergaard revealed that Irish business users generate four times higher average revenue per user (ARPU) than consumers. He revealed that higher-end business users – those who use the most minutes, spend the most on roaming and most likely use mobile data applications – generate ARPU of US$2,000, which contrasts sharply with the average consumer ARPU of US$63 (€54).

According to Vestergaard in terms of mobile data applications chosen by Irish business, SMS and email were the most visible applications.

Voice still remains the most prevalent of uses for mobile representing 89pc of all mobile spending by businesses, compared with 11pc of spending on mobile data. In 2005, voice will fall to 87.5pc of mobile spending with data spending rising to 12.5pc and the following year rising to 13.5pc of spending. By 2009 voice will have fallen to 83pc of business spend on mobile and data will have grown to 17pc of business spend on mobile.

According to Vestergaard, an increasing number of Irish workers have mobile devices – more than 50pc of the workforce — however, only a small percentage is actually mobilised in terms of using mobile as a strategy in business.

“Field force and sales force automation hold great potential in the Irish business world,” Vestergaard said.

Vestergaard said a general trend across Europe has been one of general apathy towards 3G across Europe’s business community with businesses unwilling to pay high prices for 3G services. He cited the current roaming rate of €5 per megabyte as a charge most businesses are unwilling to embrace.

“Wi-Fi is out there but as far as business travellers are concerned it does not do the job in general because it is location specific and you need to set up accounts with a host of different players. Right now people pay way to much for mobile data — €5 per megabyte is way to much.”

Vestergaard said forthcoming developments such as the advent of HSDPA (high-speed downlink packet access) will see 3G move from its current speed of around 300Kbps to 1Mbps. “This will do much to restore faith and confidence in 3G.”

Vestergaard added that HSDPA will surpass developments such as WiMax. “In about a year’s time you will buy laptops with Centrino chips and HSDPA cards built-in. Vodafone will be the most aggressive in this space can use its enormous presence to strike deals with computer giants such as Dell. WiMax will turn out to be too little too late. HSDPA will be there first. It will be successful because mobile operators already have their 3G infrastructure in place.

In terms of ongoing trends such as fixed and wireless convergence, Vestergaard said pureblood fixed-line operators will either buy – as in the case of Eircom acquiring Meteor – or enter into joint ventures such as that of BT and Vodafone in the UK in order to stay relevant. “Our research shows that consumers are more likely to go to a mobile operator than a fixed line operator for services,” he said.

By John Kennedy