LIVE FROM MOBILE ASIA EXPO 2014: Korea Telecom (KT) and China Mobile are working hard to develop content as a way of monetising their LTE networks.
Heesu Kim, SVP of KT’s economics and management research institute, said monetising LTE is particularly relevant in South Korea due to “ever increasing competition and complexity in this business environment”.
Despite the LTE market in South Korea “growing like crazy”, with 56 per cent of mobile customers using LTE, capex remains high, despite nationwide LTE coverage having been achieved two years ago.
In order to get a return on LTE investment, KT has started to bundle content services with its LTE plans to boost ARPU, with music and TV content major growth areas.
KT saw 34 per cent of customers using music services in 2013, compared with 25 per cent in 2013, with music consumption on its network rising to seven hours from four.
TV content is another area ripe for monetisation, according to Kim: “LTE smartphones have become important TV watching devices.” Around half of mobile users in South Korea watch TV on their mobiles.
Kim added that collaboration with OTT players should become a feature in operator strategies. “We’ve seen an emerging trend of telco collaboration – I’d like to see this as a new way forward for LTE monetisation in the future,” he noted.
However, the KT executive had a caveat: “Unlimited data plans if they are to extend to lower segments of consumers, OTT players will lose incentive to partner with telcos, at least in sponsored data plans.”
Lui Xin, GM of data services at China Mobile, said the world’s biggest operator is seeing digital content consumption rise by 30 per cent annually, with video playing a major role.
“Mobile video is definitely one of the killer apps. With 4G we can really start to do high definition and providing 1080p pictures,” Lui noted, adding that he expects revenue from mobile video to become more significant over the next few years.
Like KT, China Mobile is seeing increased music consumption on mobile devices: “Obviously music is a hot topic when you’re talking about 4G,” Lui noted.
China Mobile is also developing its mobile reading offering for LTE, with cloud technology enabling smartphones to read books aloud. The operator is also working with Ford to bring its Lingxi car platform to vehicles in China, leveraging its LTE network.