The mobile content and services market will grow dramatically over the next five years but poses a threat to mobile operators who face losing control of the billing relationship with their customers, according to analyst firm, Informa Telecoms and Media.

In its latest report, released Wednesday, Informa, parent of Telecoms.com, suggests that the burgeoning sector has myriad opportunities for growth but argues that shape of the mobile content market is defining the evolution of the mobile operator as a business entity.

“”The arrival of the mobile web on the mobile handset over in 2007 and beyond will see users embracing the same content they take for granted on their PCs. Operators need to ensure they are firmly locked into this value chain or risk missing out on what will be an enormous market by 2011,” says Daniel Winterbottom, senior analyst at Informa and author of the report.

The report, `Mobile Content and Services’ looks at strategies employed by various operators including the so-called `pure play’ mobile, diversifying into new vertical markets or business applications as well as those converging into a one stop communications house. Winterbottom concludes that operators need to “stick to what they do best” meaning they should focus on managing their customer’s billing and other customer information.

He believes that the emergence of a data-oriented future has operators confused about where their future’s lie. “I think that operators should focus on their core competencies and add value to their relationships with their partners by leveraging the data they have on their subscribers preferences and behavioural characteristics.”

Winterbottom praised UK mobile operator 3 UK for its X-Series flat rate data offering and for the partnerships it has garnered to provide its customers with rich internet applications. He said that the company had freed itself from trying to control everything with its previous walled-garden approach and was allowing its partners to provide the best of the Net while it focuses on core issues. “What 3 has done is to put the internet into people’s hands without the worry of cost… It’s definitely the way to go, Winterbottom says.

Strategies like T-Mobile’s ‘Web n Walk’ and 3 UK’s X-Series will allow users to realise the potential of the internet on their mobiles. The analyst predicts that by 2011, just under half of all mobile subscribers worldwide will use mobile browsing compared to today’s figure of 33.5 per cent.

Despite this, messaging – headed by SMS – will continue to dominate the overall revenues for the market, generating over half the total revenue in 2011 (from 67 per cent in 2006).

“Advanced mobile content and services have been slow to take off, but this should not be confused with the deepening relationship that we have with our mobile phones,” says Winterbottom. “We may not be buying as many games, full-track downloads or multimedia messages as operators would like, but we are spending a huge amount of time sending and reading text messages and organising our lives using the phone’s address book, clock, alarm and calendar functions.”

While Apple’s entry into the mobile market will undoubtedly have some knock-on effect, mobile music will continue to be a major contributor to revenues, although its overall share will fall from 40 per cent to 36 per cent by 2011 as new forms of entertainment such as mobile TV and video services begin to gain consumer interest.

Games, gambling, personalisation and adult content will all see significant growth, the report says, as the overall mobile entertainment market grows from $18.84bn in 2006 to $38.12bn in 2011.