Operator strategies in the smartphone era

Operator Strategies in the Smartphone EraOperator Strategies in the Smartphone Era

Alexey VolostnovAlexey Volostnov

Senior Consultant Frost & SullivanSenior Consultant Frost & Sullivan

The last decade

Mobile Telecom – Recent History

3

Smartphones outselling

feature phones in

developed economies

2003 2005 2007 2009 20112003 2005 2007 2009 2011

GPRS and EDGE launch

for faster data transfers

iPhone

launches

3G nearly

ubiquitous

Feature

phones rise

in popularity

Beeline

MTS

Content ProvidersContent Providers MNO InterfaceMNO Interface OEMsOEMs End UsersEnd Users

Yesterday

Megafon


5


feature phones in

developed economies

2003 2005 2007 2009 20112003 2005 2007 2009 2011



iPhone

launches

3G nearly

ubiquitous

Feature

phones rise

in popularity

Rise of the Ecosystem

Availability of Key Applications increases demand for

handsets

Increased handsets brings more developers & applications to

ecosystem


7


feature phones in

developed economies

2003 2005 2007 2009 20112003 2005 2007 2009 2011



iPhone

launches

3G nearly

ubiquitous

Feature

phones rise

in popularity

Rise of Smartphones

Increasing ContributionIncreasing Contribution

MNO SubsidiesMNO Subsidies

Smartphones are the

Prime Battleground for

Mobile Ecosystem Players

Smartphones are the

Prime Battleground for

Mobile Ecosystem Players

Android

Apple

Others*

Content ProvidersContent Providers Application StoresApplication Stores OEMsOEMs End UsersEnd Users

Smartphone Ecosystem is increasingly software -centric


Some applications compete directly with MNO services.


*Others includes stores such as Samsung Apps, Blackberry App World, etc.

Today

Today’s Mobile Space and Differing Operator

Approaches

11

Russia is the Largest Telecom Market in CEE

Mobile telephone subscriptions are projected to expand by 15.1%, and

Internet users by 18.4%, from 2012-2020 in Russia.

Source: Euromonitor, F&S

Smartphone sales in Russia,2008 - 2012

12

Smartphone Army

Q1- Q25 mln

Source: Vision Mobile, F&S

Share in mobile devices sales – 27% (revenues up to 70%)

13

Smartphone Penetration in Russia

13% of customers use smartphones

15 mln smartphones

6.2 mln mobile devices are used for Internet access (3.5 times growth)

Source: Ericson Consumer Lab, 2012

Russia – 68% average

Software is Emerging as the Differentiation Point for Consumers

Android

Apple

Others*

Content ProvidersContent Providers Application StoresApplication Stores OEMsOEMs End UsersEnd Users





*Others includes stores such as Samsung Apps, Blackberry App World, etc.

Today

Operator Role in the New Content Ecosystem

• Trust

• Local

• Admin

Operators to Provide Access and Explain the Rules of the Game

Price is Still an Important factor for Russian Customers, But (the Right) Content and Applications Matter

Apple’s In-App Subscription Controversy

1: Apple requires companies that offer subscription applications

outside the App Store to also offer App Store subscriptions at

same or lower cost, upsetting publishers industry-wide.

1: Apple requires companies that offer subscription applications

outside the App Store to also offer App Store subscriptions at

same or lower cost, upsetting publishers industry-wide.

2: Financial Times

announces Web app,

bypassing App Store.

2: Financial Times

announces Web app,

bypassing App Store.

3: Apple revises policy, allowing

existing subscribers (regardless of

subscription origin) access to

content in applications.

3: Apple revises policy, allowing

existing subscribers (regardless of

subscription origin) access to

content in applications.

Web (or other

channel)

App Store

30% fee back to

Apple

The Mobile

Web is the

Mobile

Application

Store’s

primary

competition

The Era of Mass-Market Mobile Data and 4G

The Mobile Data Tsunami

Source: Cisco

Source: Frost & Sullivan

The Short Term Solution

The Problem

How much is a Gigabyte?

A: 500KB -1 MB

B: 3-5 MB

C: 5-10 MB

D: 10-15 MB

A: 500KB -1 MB

B: 3-5 MB

C: 5-10 MB

D: 10-15 MB

A: 500MB -1 GB

B: 3-5 GB

C: 5-10 GB

D: 10-15 GB

Customer – Centric Solutions

New services and new

service plans are not

always intuitive for

customers

New services and new

service plans are not

always intuitive for

customers

Mobile Operators are

looking for new ways to

differentiate

Mobile Operators are

looking for new ways to

differentiate

There is enhanced focus

on customer service in the

modern telecom space

There is enhanced focus

on customer service in the

modern telecom space

Customer – Centric Solutions

The Smart Pipe

The New Telecom Industry

SMART LIVING

*****

SMART PUBLIC SPACE

Solar PV Cells

Virtual Shopping

Travelling Wave Reactor (TWR)

Morphing

From 2D to 3D HDTV

Urban Planning

Consumer Electronics Energy

Retail

AutomotiveHealthcare

Electric Vehicles

Biotechnology

Financial Services

Operators Seeking New Revenue Streams

• M2M

• Mobile Payments

• Mobile Advertising

• Cloud Services

M-payments – Operators and/or Banks?

M-payments global market to reach

670 bln USD by 2015

Beeline

&

Alfabank

MTS

&

MTS Bank

Megafon

&

MegaLabs

The Top Internet-Era Companies Have Been Defined by Increased Personalization

1990s 2000s 2010s 2020 1990s 2000s 2010s 2020

Source: eMarketer

The First Mover Advantage

The Growth of LTE – On the way in Russia

32

Source: GSA

Initial LTE Commercial Networks, Worldwide

First experience abroadFirst experience abroadCommercial LTE Networks

are expanding Worldwide

Commercial LTE Networks

are expanding Worldwide

Source: GSA

Commercial Network Service Active

Commercial Network Deployments Ongoing or Planned

LTE Trial Systems

The Sprint Example – Marketing New Technology

33

Year 2006 2007

Company

Decision

Sprint, a leader in

mobile data, chose data

as a core marketing

theme

Sprint chose not

to carry the

iPhone

Consumer

Response

Consumers were not

ready for data, and

were unresponsive to

ads

iPhone launch

was revolutionary

event for data

Market

Effect

Sprint bled customers

due to poor network

quality

Data centric

customers moved

to AT&T

Today

•Sprint stock is

below ¼ its 2006

level.

•Sprint lost its

advantage in data,

•Sprint still feels

the pain of

customer losses

in the mid to late

2000s

•The Lesson:Timing is

important!

Today

•Sprint stock is

below ¼ its 2006

level.

•Sprint lost its

advantage in data,

•Sprint still feels

the pain of

customer losses

in the mid to late

2000s

•The Lesson:Timing is

important!

The First Mover Advantage

34

22

33

11

First movers should also cater their mass-market messaging to other more mainstream services

First movers should also cater their mass-market messaging to other more mainstream services

Finally, first movers should keep a close eye on the market and adapt messaging and offerings once the market moves to the early majority

Finally, first movers should keep a close eye on the market and adapt messaging and offerings once the market moves to the early majority

First movers should build market share early among innovators and early adopters through technology availability, advances, and targeted messaging

First movers should build market share early among innovators and early adopters through technology availability, advances, and targeted messaging

Thank You!Спасибо!

Operator strategies in the smartphone era

Technology

Transcript of Operator strategies in the smartphone era