Operators to find new growth areas in 2011
1. Operators need to choose a smartphone platform strategy
The popularity of Android and iPhone devices has led mobile operators, developers and handset manufacturers alike to re-focus on the smartphone platform. Operators are trying to decide whether to build their own platforms or accept that the Internet and OS players will dominate. The outcome of this decision will determine who are the winners - and losers - in the battle to derive maximum value from the development and penetration of the smartphone platform.
2. Democratization of smartphones
In 2010, we have seen smartphone adoption in the lower price tiers as mobile operators look to grow data revenues from a broader user base, and we expect this trend to accelerate in 2011. The drive by some vendors to reduce the cost of smartphones opens up a whole new opportunity to create devices for the mass market, a strategy that is welcomed by the mobile operators. Informa Telecoms & Media expects 342 million smartphones to be sold worldwide in 2011 equating to 27% of total handsets sold.
3. Strategic partnerships between operators and Internet players
The most successful mobile operators will be the ones who can form strategic partnerships with key Internet players, and not the ones who want to pull up the drawbridge and block these companies from accessing their customers. While operators look to develop these relationships, intriguingly they too are being forced to become more conciliatory in the way that they work with each other.
4. Operators to focus on vertical markets
Operators have been talking about the potential of mobile enterprise for many years, but the difference this time around is that their starting point is machine-to-machine communications, rather than voice and SMS. The focus of operators today is the healthcare sector where they are still in the early stages of learning where the best opportunities lie. They will need to do the same for each and every vertical sector to decide where to position themselves to develop profitable businesses.
5. Web 2.0 will provide opportunities for growth
Mobile operators have an opportunity to harness IM and social networking in order to increase the stickiness of their traditional messaging services, and to generate additional traffic and revenues from these services. To achieve this, mobile operators need to maintain a primary role in how their subscribers access IM and MSN. For many operators, this means implementing network-based address book services, which will be the starting point for all of their subscribers’ mobile communications.
6. Operators need to catch up in the superfast broadband race
For the most part, the real winners in the superfast broadband race have been cable operators – telecoms operators must do something about this in 2011. Those that have rolled out fiber need to be more aggressive in their efforts to convince consumers and service providers to move to their new networks. Low prices and attractive bundles, rather than superfast speeds, will be vital. Consequently, operators will rekindle their interest in investing in low-cost VDSL, both from the street cabinet and the local exchange
7. The battle for the connected home heats up
TVs will overtake games consoles in 2011 as the dominant in-home connected device, at least in terms of units sold. But this does not mean people will actually use the online services. By the end of the year, we will be much closer to knowing whether Google TV, Apple TV, Canvas and HbbTV are game-changers or simply another case of the Emperor’s New Clothes.
8. Cable TV declines in Western Europe
Operators are not just struggling to cope with converting European cable homes from analog to digital, they are competing to upsell their subscribers to bundled packages, especially triple-play (TV, broadband and telephony) and even quad-play (triple-play plus mobile) service bundles. Our forecasts predict that the number of Western European TV homes taking cable will fall from 51 million - 31% of households - in 2006, to 48 million – 26% of homes - in 2015.
9. LTE spectrum fragmentation will undermine its global potential
LTE’s inherent adaptability, the very feature which has helped it gain global acceptance, may actually come to undermine its global potential. The failure to identify globally harmonized spectrum for next-generation “4G” services means that, in order to meet the demands of a diverse range of frequency allocations, The LTE camp is required to provide operators with multiple options in terms of channel size and spectrum band, as well as a choice between FDD and TDD modes.
10. Network rationalization continues
Regardless of market dynamics – be it “mature” Western Europe or “emerging” Africa – 2010 has been a year of network rationalization. And 2011 looks to be no different. As it becomes unsustainable for minor carriers to roll out networks, market consolidation will follow, and so too will network rationalization. We expect to see similar instances of network sharing in Africa, especially as carriers come under increasing pressure to universalize their networks and reach the underserved.