Monday, March 02, 2009

Mobile is still strong, despite the rest

It is hard to be optimistic on anything these days. When you look at your portfolio, read newspapers, watch TV, you are bombarded with negative over negative.

However, in a downturn there are always areas of optimism, sectors that fare much better than the rest. It is just a matter of picking them and ride the wave, while everything around is collapsing.

One of these markets - in the current downturn - is mobile. Just look at the figures below, coming from a recent IDC study.

Granted, it is not 500% year-over-year growth. But it is growth nonetheless. Personally, I would sign up my entire portfolio for those numbers. I am getting used to the -30% to -50% losses...

Why will mobile operator still do well in 2009:
  1. Voice. In a crisis, people won't give up their cell phone. They will give up their landline, moving everything to their mobile device. And they will talk more, because that is what you do when you have time and you are depressed (the other thing is playing games, which is the other market that won't suffer that much). Voice revenues are going to go up, not down, with zero capex for the mobile operators.
  2. Data. The trend towards smartphones and data plans is not going to change. People will wait a bit more to switch mobile phone, but the next one is for sure a smartphone. Some might even drop their DSL at home and go for an iPhone or the like, to save money and have everything in one place. Data plans are a great revenue generating tool for mobile operators and they will get more.
With all the clouds outside, it is hard to see clear and pick potential winners. But if you stop and analyze the market for a second, it is easy to see why mobile operators are going to fare much better than the rest. And with them, those who sell them solutions to improve data revenues and customer retention.

Life is good, I just have to stop looking at my portfolio, read news and watch TV ;-)