An amazing growth story comes to an end: Smartphone penetration isn’t really growing any longer in mature markets. Smartphones are still sold in high volumes, but the difference is that they’re now primarily sold – subsidised or not – to existing smartphone owners, who upgrades.
In 2007, there was an untapped demand for smartphones. With penetration rates approaching 70%, this demand is now fulfilled.
Also maturing markets show signs of saturation – at penetration levels less than 20% – since income level is proven to be the primary factor behind smartphone penetration.
The need for the 30 USD smartphone crystallises from this analysis. But operators must also upgrade networks for mobile data – and make mobile data hassle-free also for prepaid customers.
Austria, with a population of 8.5 million, used to have five mobile network operators, making it one of the most competitive mobile markets in Europe. Now there are three left.
When Hutchison-Whampoa, the owner of ‘3’, made a bid on Orange, the European Union needed 11 months to approve it. EU appears to have changed their thinking since. It’s roaming that is under scrutiny now: If operators would agree to abolish roaming fees within EU, maybe EU could be more forgiving to national M&A?
Consequently, European operator executives are publicly advocating the need to cut the number of mobile operators to three per country. If Telefónica’s bid for E-plus in Germany is approved by KPN’s shareholders and by the EU, it will be the ultimate starting signal for Europe’s march towards national consolidation: If it can be done in EU’s largest country, why not elsewhere?
But since Austria serves as the 4-to-3 precedent of Europe, let’s check what the first six months with three mobile operators did to the business results.
Comprehensive business benchmark including a total of 129 KPIs covering revenue, OPEX, CAPEX, productivity, traffic load and network quality – with a peer group solely consisting of network sharing joint ventures.
Due to pre-agreed confidentiality requirements, the identities of participating JVs are fully anonymous.
The results demonstrate the value of the JV-specfic benchmark approach: Network sharing JVs have established cost and productivity levels that are elevated far beyond the obvious sharing effects. Also network quality levels are very high even though traffic load is higher. To improve further, JVs need to compare with their likes – other JVs – and not to regular mobile operators.
Who are the operators with the most advanced vision for monetisation of big data? How have they positioned themselves and their products? Which ecosystem are they targeting? What are the actual opt-in and opt-out figures? How is the privacy issue dealt with? How much revenue is created so far?
These questions were answered in an analysis provided to a global provider of business support systems.
Triggered by Vodafone’s 7,7 BEUR cash offer for cableco Kabel Deutschland and the emphasis Vodafone has put on communicating the importance of being able to offer quad-play (fixed broadband, TV, voice and mobile) in the German market, the question has to be asked: Isquad-play a competitive necessity?
This analysis compares data from operators that have taken the quad-play road: Orange France, SFR, Movistar Spain, Virgin Media, Swisscom, TDC and Orange Poland.
Their take-up might be impressive – driven by significant discounts – but what effect has it had on customer loyalty?
Peer group consisting exclusively of primary data from Swedish, Finnish and Norwegian operators. Due to pre-agreed confidentiality requirements, the identities of the participating operators are fully anonymous.Comprehensive business benchmark including a total of 444 KPIs covering revenue, OPEX, CAPEX, productivity, customer distribution, performance, load, quality and innovation & growth – for 33 functions within a mobile operator.
The results demonstrate the value of a region-specific benchmark approach: Swedish, Finnish and Norwegian operators have global leadership in a wide array of business aspects and a global benchmark would therefore leave them without guidance on how to improve further. In contrast, the participating operators have got a great tool to improve their local competitiveness even further.
The first mobile operators have already reached the tipping point where handset revenue exceeds service revenue. The only reason why the average handset revenue isn’t higher than 14% of total revenue is subsidisation: Handset cost averagely stands for 30% of operator OPEX.
The increase in handset sales is bad news for the EBITDA margin of operators. Even with a positive gross margin on handset sales, total EBITDA margin is diluted. The issue is deeper than handset subsidisation: Even when at its best, handset retail is a low margin business. Should operators opt-out?
Analysis of operator business upsides and downsides when launching 4G LTE. Commissioned by Comptel. Live presentation of an extract of the analysis, titled “Pinpoint the right customers: LTE handsets in wrong hands will dilute margin” to Comptel’s customers at two occasions during MWC in Barcelona.
A special analysis, commissioned by Comptel was launched shortly after.
Market analysis covering differentiation parameters in commercial offers (throughput, allowance, service content, QoS, price), overage handling and traffic management policy for 17 operators in 5 key markets globally. Concluding what worked – and what didn’t. Resulting in comparative recommendations. Commissioned by an international operator group.
Mobile operator revenue is under pressure. Increased competition leads to decreased prices. Smartphones have transformed the business of operators: Data services are now more used than both voice and messaging. In parts of the world, these challenges are however coped with.
“Swedish, Finnish and Norwegian operators play in a league of their own”, says Fredrik Jungermann at tefficient. “Nowhere else you’ll find as high mobile data traffic, as many smartphones, as many dedicated mobile broadband subscriptions and as high network quality. In addition, the mobile operators in Sweden, Finland and Norway are among the most productive operators in the world.”
To improve further, the Swedish, Finnish and Norwegian mobile operators can’t continue with global benchmarking – it is simply not challenging enough. Consequently, the international efficiency expert tefficient brings a benchmark specific to Sweden, Finland and Norway only.
The benchmark covers all business aspects: revenue, OPEX, investments, productivity, customer distribution, quality, load & complexity and innovation & growth. In total, there are 435 KPIs in the benchmark.
Swedish, Finnish and Norwegian mobile operators can – by using the benchmark and the analysis that comes with it – improve its local competitiveness.
Deadline for participation is 31 January 2013. Input data is for the full year 2012 and need to be finalized by 25 March. The results are ready latest 26 April 2013.
Measure, compare and improve competitiveness within telecoms