Of global smartphone shipments Q3 2013, the four major operating systems stood for 99.4% – entirely dominated by Android. Why on earth should telecom operators then care to support the remaining 0.6%? Like Firefox, Tizen, Ubuntu and Sailfish?
Yet some operator groups, often with exposure to maturing markets, are actually doing a whole lot to breed viable alternatives to Android, iOS and Windows Phone. Why?
It’s not just about cost. In the established ecosystems, operators see the risk of being squeezed out. Partnering with providers of alternative smartphone OSs can re-establish operators in the ecosystem and give back control over the end-user experience.
Download analysis: tefficient public industry analysis 1 2014 alternative smartphone OSs
2013 ended with over 1 billion smartphones sold – a new record. But mature market operators should look at Korea as a projection of what will come: It is the world’s most advanced LTE market based on penetration and usage levels.
The operators in Korea – SK Telecom, KT and LG Uplus – are continuing to sell a lot of LTE equipment to its customers, even though sales slowed somewhat during 2013. But whereas the sales of LTE equipment earlier led to a lift in overall smartphone penetration, it looks as if it’s not going to drive smartphone penetration very much longer: See how the three top curves in the graph slow down even though the LTE curves go up.
Note: LG Uplus hasn’t yet stated overall smartphone penetration for Q4 2013. Non-LTE smartphones are soon phased out of LG Uplus.
In the world’s most advanced LTE market, LTE seems to run out of fuel. Existing smartphone customers do upgrade to LTE smartphones, but the overall smartphone penetration in Korea doesn’t climb above 70% [SK Telecom holds 50% of market, KT 30% and Uplus 20%]. If we extrapolate, the LTE penetration will equal the smartphone penetration during 2014 – more or less.
For mature market operators believing in LTE’s ability to take smartphone penetration levels beyond the 70% level observed today in countries like e.g. Sweden, Norway, the Netherlands, Australia, the UK and France this is bad news. The Korean development indicates that LTE as such is not enough.
The situation resembles 2007 – before the arrival of the iPhone. Incremental improvements had made products from e.g. Nokia the best ever, but disruption was needed to create new growth. iPhone was the catalyst in 2007. The mobile world – including Apple – are back into incremental improvements and the current products are the best ever. From where will the innovation come that creates new growth in mature markets?
Analysis & Go-to-market, 2013
How are mobile operators monetising mobile data in Sweden, Finland, Norway, Denmark – and in a few other international markets? Which changes have operators made to their monetisation models during the past years? How have these changes affected business results and how has competition responded?
Based on these international facts and best practice, what would tefficient recommend when it comes to e.g. volume caps, overage policy, throughput tiers and shared plans? Taking local conditions, operator strategy and market position into account.
Commissioned by an operator.
Remember Blyk? The high-profiled venture that targeted the young UK population with free calls and texts – if they agreed to received targeted advert texts on their mobiles. After launch in 2007, the UK service was shut down 2009. [The Blyk name still exists in e.g. the Netherlands where Vodafone uses the concept.]
The question is if Swedish ad-funded MVNO Wifog – launched yesterday – can make a similar concept fly. Wifog has realised that in 2013, people spend most of their device-interaction time connected to the Internet. Their proposition is therefore data-centric: Watch 2-5 minutes of video adverts a day (you can schedule these) and in return get unlimited data (on 3’s 3G network), 120 minutes of voice and 200 SMSs per month.
Wifog tells advertisers that they can reach the right audience – through targeting and analytics. It’s likely that Wifog’s users will be profiled based on what they use the Internet for – much more powerful than the orginal Blyk concept which was based on end-users selecting their “areas of interest”. The question is just how interesting this is for advertisers in a world where Google – without asking for our opt-in consent – already targets us with device-specific, location-specific and usage-based adverts.
Market-specific comparison of business results, strategy, differentiation and partnerships of operators – with the purpose of identifying the unique profiles of the operators active within certain country markets. Analysis based on public material.
Commissioned by Canonical, the company behind Ubuntu.
Examining the strategic choices of operators: At tefficient, we’ve been having our ears to the ground for some time picking up and summarising operator data on how 4G LTE adoption is developing globally. An absolute majority of operators who have launched 4G LTE still fail to report their 4G LTE customer number, their 4G LTE device penetration and their 4G LTE traffic level – but it’s on its way up.
And for those that do report, the third quarter of 2013 represents a shift: No longer is 4G LTE a niche service for a few early adopters – instead it is mainstream. At least in parts of the world.
Three criteria need to be fulfilled to be able to count a user as a 4G LTE user. This analysis introduces the 4G LTE cube which visualises the strategic choices operators have when it comes to all three. So far, strategies differ very much – and they affect adoption strongly.
Download analysis: tefficient public industry analysis 14 2013 LTE
Analysis & Consulting, 2013
Which operators in the world have advanced the furthest in incorporating operator Wi-Fi – based on hotspots and/or homespots – into a solution to offload mobile data and enhance the mobility of Wi-Fi-only devices? Which are their figures? What are the strategies and drivers behind? How has monetisation been solved? Are strategies different for telcos, cellcos and cablecos?
How should we apply what’s happening elsewhere onto our local competitive context? What should we be prepared for?
tefficient was asked to prepare and faciliate a workshop – focusing on these questions – for key stakeholders within an international operator group.
Why CAPEX? Today, most executives would answer that CAPEX is necessary for two reasons: To grow (or sustain) revenue and to reduce OPEX.
In reality, not all CAPEX is productive. Investment decisions might prove wrong. The return on an investment can be lower than expected when competition does the same (or the opposite). Implementation delays might lead to that the window of opportunity is missed.
Since mobile telecom – compared to other mature industries – is a CAPEX intense business, CAPEX efficiency is important.
This analysis introduces a simple way to compare CAPEX efficiency – looking at the effects on both revenue and OPEX. It shows that some mobile operators have a track record of high CAPEX efficiency, whereas others have not.
Download analysis: tefficient public industry analysis 13 2013 CAPEX efficiency
Denmark has had it for more than 10 years, Belgium got it a year ago and now EU proposes it for all of EU: Maximum effective binding period of 6 months for consumer mobile contracts.
What happens to a mobile market when such a change is introduced and why is this change actually so significant?
This analysis shows that when Belgian consumers no longer are locked into long contracts, it has a major impact. The question is also if the transition is over in Belgium: Danish figures suggest it might get worse.
Since the EU commission – as part of the 11 September 2013 “Connected Continent: Building a Telecoms Single Market” plan – is proposing that EU consumers should have a similar right to cancel contracts after six months, the question is obviously: Is this also your future?
Download analysis: tefficient public industry analysis 12 2013 Six months contracts
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.
Download analysis: tefficient public industry analysis 11 2013 Smartphone penetration