The report describes and analyses current and emerging trends in the phone-paid services market. It has been written by Analysys Mason on behalf of PhonepayPlus.
It builds on a baseline of previous work commissioned by PhonepayPlus, and covers not only the current market and its evolution over the past 12 months, but also the outlook for the market in the next 12 months. The work draws upon a 3000-consumer survey on usage and perceptions of phone-paid services, as well as on in-depth interviews with 25 companies from across the phone-paid industry.Â
Despite prediction of a downturn, in the past six months, nearly half of consumers reported having used phone-paid services and, although mobile premium-rate services have fared better than fixed, the overall market has shrunk. In revenue terms, we estimate that the phone-paid market had contracted by 15% from an estimated GBP1080 million in 2007 to GBP920 million in 2008. This trend is set to continue in 2009 driven by the following.Â
It suggests most premium rate services will experience declining revenues in the next twelve months and in general, the phone-paid services market is predicted to continue its decline in 2009. This is mainly due to a perceived lack of innovation in the marketplace, coupled with increased competition from alternate, and often free, services. For example, 50 per cent of consumers who plan to discontinue their use of directory enquiries services will do so because of the ease with which they can access similar services for free.Â
At the same time, the impact of the economic downturn is expected to become more severe as fears of a global recession grow and consumer spending contracts as a result. Some services are expected to be more vulnerable to lower disposable income than others. 35 per cent of respondents said they would be less likely to place calls to television voting or competition lines in the current economic climate compared to 20 per cent of those who use phone-paid services to access adult content, for example video or photos.Â
That said, the report highlights the impulsive nature of participation in phone-paid services such as television voting or competition entry. Therefore, it is difficult to predict consumer take-up of such services based on premeditated answers to questions. Mobile voice and video short codes could potentially give a boost to the industry by improving price transparency, now they are available on all mobile networks. Of all payment mechanisms, these are likely to see the strongest growth over the next year. While usage of Payforit has grown, its overall take-up levels have remained low. It is likely to continue to grow next year, particularly if public awareness increases and mobile broadband becomes more widespread. The use of 09x numbers is set to continue its decline (with faster decline possible due to voice short codes and deteriorating economic conditions), although premium-rate SMS will fare reasonably well despite some potential negative impact from mobile broadband towards the end of the year.
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