Advertising will account for more than $1bn (&£689m) of revenue for mobile Internet portals by 2005, according to a report by telecoms, IT and new media consultancy Analysys.
The report also suggests consumer disappointment with mobile phone WAP (Wireless Application Protocol) services has led to a slower growth in mobile Internet users than investors had anticipated.
The report “Mobile Portals and ASPs (Applications Service Providers)” says that by 2005 over half the predicted 1.1 billion mobile phone subscribers will be accessing Internet services from their handsets.
The number of users accessing the Net through mobile phone services will mean mobile Internet portals which allow customers to access Internet content quickly and easily, are forecast to earn more than &£1bn from advertising and commissions.
But the portals need to start building customer bases: “Start-ups without substantial financial backing risk running out of cash reserves before sustainable revenues from transaction commissions and advertising can be achieved,” says report author Katrina Bond.
Bond says mobile portals need to find ways of generating non-intrusive advertising and managing secure transactions to generate revenue in the long term.
Take-up of Internet through mobile phones has been slower than many investors anticipated due to market disappointment with WAP services, says the report. Telecoms industry insiders blame WAP advertising from some of the mobile phone operators which promised too much too soon and left consumer disappointed with what was available.
Mobile operators and established Internet companies like Yahoo and AOL, are predicted to both partner with and acquire mobile portal start-ups.