Invest – and conquer?

8 October 2013 Fredrik Jungermann

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

Analysis, Belgium, Denmark

How six months contracts changed mobile in Belgium and Denmark

13 September 2013 Allan Greve

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

Analysis, equipment sales

Why the smartphone growth is over (for smartphones as we got to know them)

23 August 2013 Fredrik Jungermann

Smartphone penetration vs GDP 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

Analysis, Austria

From four to three operators: The quick fix of a broken market?

12 August 2013 Fredrik Jungermann

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.

Download analysis: tefficient public industry analysis 10 2013 From 4 to 3 Austria

Analysis, Big data, References

Monetising big data: Operator best practice

17 July 2013 Fredrik Jungermann

Analysis, 2013

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.

Analysis, Fixed-mobile convergence

Quad-play: A competitive necessity?

5 July 2013 Fredrik Jungermann

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?

Download analysis: tefficient public industry analysis 9 2013 Multi-play

Benchmarks, Finland, Nordic, Norway, References, Sweden

Sweden-Finland-Norway-specific mobile operator benchmark 2013

30 June 2013 Fredrik Jungermann

Benchmarks, 2013

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.

Analysis, equipment sales

Why operators should refrain from handset sales

27 March 2013 Fredrik Jungermann

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?

Download analysis: tefficient public efficiency analysis 3 2013 Handset sales

4G LTE, Analysis, Consulting, Go-to-market, References

Guest speaker at Comptel’s MWC stand 2013

4 March 2013 Fredrik Jungermann

Analysis and Consulting, 2013

Comptel MWC presentation 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.

See this 1 minute video summary interview:

http://youtu.be/yK_5ExLSIIk

Comptel’s original blog: comptelblog.com/2013/02/is-there-an-monetization-upside-using-analytics-when-launching-lte/

Tefficient