Mobile operators’ dominant status in the emerging markets mobile content space is set to change due to strong competition from new platforms such as app stores. According to research undertaken by Ovum, operators need to make urgent adjustments to their content strategies if they are to adapt to rapid shifts in the market.

In its report, Monetising Mobile Content in Emerging Markets, Ovum finds that once consumers buy a data access plan, they begin to move away from telco services. According to analyst and report author Angel Dobardziev, this trend is heightened by the fact that many device and platform vendors are establishing alternative content distribution platforms that connect providers and end users more quickly, easily and cost-effectively than carriers. “This will ultimately reduce the role of mobile operators to little more than providers of bandwidth,” he says, adding that “unless telcos make rapid changes to their strategy and execution, their dominance is set to be challenged.”

According to the report, while emerging markets can expect to post significant growth in the mobile data space over the next five years, the market is still “highly immature.” Fewer than 20 per cent of users venture beyond SMS, ringtones and logos. In this context, feature phones will be “the key mobile battleground” in the short-term as smartphone use continues to be limited until at least 2013.

Dobardiez said that current telco strategies were “increasingly inadequate” for addressing these new challenges. “The key issue is one of strategic clarity on whether telcos plan to make money from bandwidth, mobile content or both,” he said. “This issue goes to the core of the bit-pipe versus full service provider debate.”

The report states that focusing on mobile bandwidth and making a fair return on billing for content could be a profitable strategy for carriers, unattractive as the bit-pipe role may be. Another option would be the development of a well-executed content strategy, which would require a significant change in mindset and considerable infrastructure investment to facilitate a well-executed mobile content strategy. “What is not an option for telcos is to carry on pursuing both access and content strategies but failing to do either,” says Dobardziev.