Additional World Cup mobile revenues could come from old technology

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A report published by the World Wireless Forum (WWF), a research body, estimates that the FIFA 2006 World Cup to be held in Germany next year could generate an extra US$8.5bn in revenues for the mobile telecoms industry. The report notes since the tournament, in which 32 countries will compete, is the biggest event of its kind, mobile telecom companies will benefit from the disruption to normal social patterns of behavior.

The marginal income from the competition’s impact would add more than 1% to the global mobile industry's annual revenue estimated at US$800bn. The authors of the report estimate that the biggest single driver of the extra revenue will be text messaging, accounting for US$7.3bn of the additional consumer spending. This emphasis on the importance of basic telecom services goes against the expectation that it is new enhanced mobile capabilities that will be the main revenue generators.

According to the authors of the report: “Received wisdom believes [the tournament] to be a major showcase for the latest mobile phone technologies such as mobile video and 3G. However, contrary to this wisdom, we believe the most significant contributor to the extra revenues will come from messaging services, used to provide match updates, alerts or quick communication.” The report warns that operators should rethink marketing strategies if they are to realize the potential benefits or risk losing out to non-mobile companies. The report suggests that mobile companies should concentrate on encouraging use of existing technology for the World Cup and

that a strategy based on promoting the latest handsets would fail to generate the extra revenues. “This is a long term recipe for failure that will play into the hands of household names such as Adidas, Nike and McDonald's companies with a stronger understanding of how and why behavior will change during the World Cup.”