I Just Called to Say I Love You

June 12, 2009

It doesn’t have to be Valentine’s Day for Stevie Wonder songs to be played on handsets — ringback tones are popular year-round, including in many emerging markets. With operators offering customization by caller number, a boyfriend can play Stevie’s “I Just Called to Say I Love You” for just his girlfriend.

The trend has not skipped the world’s most populous nations – China and India. China Mobile first launched the service in 2003 and has a very high adoption rate of about 40%. The operator said ringback tone revenue in 2008 grew 22% to Rmb14.38bn ($2.1bn), equivalent to 3.5% of its total service revenue. India has a similarly vibrant ringback tone market, enough so that Vodafone recently announced that it will partner with local mobile content specialist OnMobile International to provide ringback tones across its emerging market footprint.

In Africa adoption is also growing. In Nigeria, for instance, most of the operators offer a range of ringback tones. MTN recently upgraded its CallerTunez service to enable multiple tones for different numbers and has deployed the service across much of its footprint in the region. Glo Mobile Nigeria offers a choice of some 4,000 tunes for its Caller Tunes service; it deployed a ringback tone service when it launched in Benin and will offer it when it launches in Ghana later this year. Zain is also deploying the service across its footprint and will launch shortly in Nigeria.

Ringback tones is one of two applications — mobile broadband aside — that are driving non-voice services in emerging markets, the other one being text messaging. Both ringback tones and text messaging are available on virtually all handsets, and both are showing strong growth. Ringback tones have the extra benefit of being relatively simple to implement and market, and thanks to a simple preview capability they are also easy for end users to set up. Simple pricing that is readily understood is also attractive to users; typically there is a single one-off charge to subscribe to the service for a month or two.

Advertising sponsorship is a new business model that shows much potential: Turkcell has successfully launched such a service, as profiled in our recent report Mobile Advertising in Emerging Markets, and we expect to see further launches over the course of the next year. Indeed, simple services and advertising will be especially useful for operators in driving non-voice revenue in markets where income levels are low or adoption of sophisticated handsets is limited.

— Jan ten Sythoff, Analyst at large

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