Upward of 300 million people—more than own PCs—across the world subscribe to mobile telephones. If, as forecast, this figure passes one billion by 2003, mobile telephones will be as common as television sets.
Such a penetration rate—combined with technology that provides for the fast transfer of data on mobile networks, standard protocols that deliver Internet-like services on smaller screens, and the very personal nature of mobile telephones—will drive a mobile-commerce revolution (see sidebar, "M-commerce: The next big thing"). Within three years, the annual value of goods and services transacted over mobile networks could reach $13 billion, or 7 percent of all e-commerce transactions.1
Wireless operators are well placed to benefit from this growth because they alone own and operate the mobile networks that make m-commerce possible. But as available bandwidth proliferates and the coverage capabilities of networks converge, the basic business of transporting data will become more competitive, and profit margins will fall. Hence operators are keen to seek value-creating opportunities beyond the simple transport of data.
In theory, mobile operators could compete at all levels of the m-commerce value chain, from the provision of basic technical services to the supply of lucrative, customer-facing content. The...