Carriers Should Sacrifice Early Videophone Profits

Strategy Analytics has released a report downgrading its previous predictions for mobile video telephony usage, because they were vastly over-optimistic. “The current forecast now estimates that there will be 150 million video telephony users globally by 2010. Each user will spend an average of 14 minutes per month on video calls, generating $4 billion in revenue for the network operators. The report recommends that operators should adopt competitive pricing approaches and improve service usability to lure in new customers and build a solid customer base.”
The general tone of the article is that there is a latent desire for mobile video but it has been hampered by poor quality and high prices. Cheap or free usage, as an initial promotion or part of a bundle, is viewed as the best way to drive up penetration.