Live from the PMA Law Conference: Wireless Subscribers to Skyrocket

If you look at the numbers, it’s no wonder there is such a tremendous interest in wireless marketing.

In 1986, there were 500,000 wireless subscribers generating $670 million in revenue. Ten years later, those numbers jumped to 38 million subscribers ringing up $22 billion in sales. And this year, there were 223 million wireless subscribers generating $118 billion in revenue.

“It’s just proliferating,” said Steven Tugentman, associate general counsel for Verizon Wireless and a speaker at the Promotion Marketing Association’s annual Law Conference. “At this stage of the game, 72% of the population has wireless services with tremendous, tremendous marketing activities.”

The growth in marketing opportunities is coming from a number of fronts, including text messaging, premium downloads and user-generated content, as well as entertainment-related content like music and video games.

In 2008, that kind of mobile content is projected to generate $34 billion, compared to $17 billion this year and $2.4 billion in 2003.

Text messaging, MMS and e-mail will drive $7 billion in sales by 2008, up from $5 billion this year and $1 billion in 2003.

“There are lots of possible marketing opportunities there,” Tugentman said.

On the corporate side, there were 1 million wireless subscribers in 2003, generating $746 million in revenue. Those numbers are expected to reach 33 million subscribers and $15 billion in sales by 2008. That’s up from $15 million users and $7.8 billion in revenue this year.

A number of trends have led to the explosion in subscribers and revenue:

• Broadband has had a major impact on media consumption because it enables users to download content to their handsets at high speeds.
• The Internet and wireless devices have made consumers hungrier for a customized experience.
• Content digitalization has infiltrated consumers’ lifestyles, letting them download music and video or conduct e-commerce transactions through digital media.
• Ring tones and other means of self-expression offer people the ability to define themselves through content and make a statement about how they want to be identified.
• Design and user experience have become integral to consumer electronics as a whole. “It’s not just the utility of sending and receiving calls, it’s the statement of who you are,” Tugentman said.

However, all these marketing opportunities lead to legal and regulatory issues. And the upsurge in family-share lines has raised the stakes even higher, he said.

“There is a very big concern from consumers, as well as industry regulators, in terms of what kind of content is getting to users’ hands, Tugentman said.

In an effort to address concerns, self-regulatory guidelines have raised the bar in setting solid practices resulting in a solid user experience, he said.

He said that self-regulatory and best-practice guidelines instituted by the industry trade association CTIA and the Mobile Marketing Association should be followed.

“It’s going to be very important to understand these guidelines because carriers generally won’t accept any content or programs that don’t comply with these guidelines,” Tugentman said.

The PMA Law Conference, held in Chicago, ended yesterday.