The value chain and the customer relationship will increasingly be dominated by a new kind of entity, which we are calling the SMART player – an acronym that stands for Services, Management, Applications, Relationships and Technology, and reflects the way these players take responsibility for the end-to-end customer experience.
This role builds on, but radically extends, the way some device vendors such as Apple and Google began to provide a managed experience on the basis of internet and cloud-based services.
There will be relatively few SMART players. Some will be device or consumer electronics vendors; others will be software or applications vendors, especially those with a strong web presence. A small number of them will be network operators.
SMART players will own the majority of customers through the provision of managed device platforms. This will enable them to dominate the content and applications markets through tightly controlled, semi-open “service hubs” combining the functions of applications stores, content stores, and device management.
What is the operator’s role?
There will be increasing differentiation between mobile network operators, with several distinct roles emerging. There will primarily be:
• operators that provide the SMART role themselves;
• operators that act as connectivity providers to the SMART vendors;
• operators selling low-cost voice and/or data and/or simple transaction-oriented Internet services directly to end users.
We have called the MNOs acting as suppliers to SMART players’ LEAN operators, which stands for Low-cost Enablers of Agnostic Networks. They will compete on price, performance (including coverage, capacity and speed) and flexibility to become the capacity and connectivity provider of choice.
The agnosticism refers to both applications and devices, implying that these players are enabling others’ devices and services to function most effectively, rather than taking a vested interest in one platform.
The critical success factor for LEAN players will be to facilitate services to others, enabling developers to have deep access to their networks for the timely and efficient provisioning of mobile services.
There will be a number of other big changes in the industry’s landscape.
Consolidation of operators will continue
A greater proportion of operators will become part of large, international groups. While many of the familiar operator brands will survive, they will be joined by powerful new cross-regional players from the emerging markets, which may also buy their way into the mature markets. In a few markets there will be consolidation between competitors, though this will remain unusual.
Network sharing will become more common
Operators will compete via service provision and cooperate in network operation. In some markets, particularly the most mature and competitive, the number of physical network operators may reduce to one.
MVNOs will continue,
Network-sharing deals will make the distinction between MVNOs and ‘real’ network operators less clear-cut. The important distinction will be between those operators that seek to supply a branded, packaged customer experience and those that are content to provide connectivity – either directly to end users or to others who will provide a packaged customer experience.
Emerging global top tier of operators
This will include players from outside Europe and North America. Some of the 2009 major regional players such as Orascom, Zain, MTS, MTN, Bharti and China Mobile will be global players, with major holdings outside their home regions.
In some cases this will be through acquisitions in Europe. Some of the cash-rich regional players will have bought up second or third tier operators, especially single-country national players that are not part of large operator groups. There is likely to have been at least one acquisition of a tier-one player group by a regional player.