Today’s telecoms operators inhabit an increasingly complex and challenging environment. They must deal with an explosion of data traffic (driven by the growth in video and multimedia applications) and with the introduction of new technologies that are intended to allow them to carry this traffic profitably. At the same time, they must integrate disparate fixed, mobile, and broadband services – both to meet enhanced customer demands and satisfy investor, internal, and operational efficiency imperatives. Moreover, they must do this in the face of a slew of new competitors, potential partners, and potentially disruptive technologies.
Ovum’s Telco Strategy practice provides a perspective across the entire fixed, mobile, and integrated communications marketplace, offering a converged view of the future. Our remit is to provide clients with insight across the strategic horizon into the challenges facing operators, how we see these market forces evolving, and our advice to operators on how they should respond.
The global mobile & fixed market outlooks
These reports set out our medium-term “big picture” analysis of the key trends that are shaping the telecoms industry landscape. Here we set our views as to the internal and external dynamics that will impact on fixed and mobile operators during the next five years, from shifts in the composition of ARPU to the deployment of new network bearer technologies. The reports sit alongside our fixed and mobile forecasts, which provide country-level detail on how these trends will play out across our 55 forecasts countries and in the rest of the world.
Key themes for 2012
The future telecoms market outlook
Our comprehensive suite of forecasts covers fixed and mobile telecommunications, providing our five-year outlook for network operators’ connections, lines, and voice and non-voice service revenues. We also provide a more immediate focus through a series of regional overviews of operator performance, and incisive analysis of the global trends through our global fixed and mobile outlook reports.
We have also created an “over-the-horizon” scenario through our 2020 series of reports, and we return regularly to this through our “Moving down the road to 2020” theme, reporting on key developments that indicate the way that the future industry is shaping up.
Competitive strategies for operator success
Operators need to develop plans to compete with their peers and with other kinds of players impacting on their market, including over-the-top players, virtual operators, and others. These can include product portfolio decisions, customer retention strategies, pricing, and innovation in both product and process.
As well as optimizing existing business models and processes, operators will need to adapt to new ones. In particular, they will need to develop ways to profit from new revenue opportunities as traditional sources of revenue from the provision of voice and connectivity continue to decline. We will examine these opportunities and continue to review the extent to which operators have been able to realign themselves towards new sources of revenue. As part of this we will continue to provide the “Innovation Radar,” which tracks innovative services from telecoms operators.
The role of the network operator in the future ecosystem
The telecoms marketplace is becoming much more complex and multi-layered. Services that were once intrinsically linked to the access proposition (for example, voice telephony) have become one application among many, with device manufacturers, application service providers, content owners, and others all jostling for position. Operators need to adapt to a new ecosystem in which they will have new and different roles. The advent of cloud business models is an opportunity for operators, in that these presuppose ubiquitous connectivity, but it is also a challenge in that the delivery of cloud services requires skills and assets outside the core operator competence.
We will therefore investigate the evolution of relationships between telecoms operators and the key web players.
Nowhere is this challenge more apparent than in the “Internet of things” domain. New business models are increasingly appearing in which players that have not hitherto been services providers, such as consumer electronics manufacturers and insurance companies, are playing a greater role. We will be looking in more detail at operator involvement in these “B2B2C” propositions for machine-to-machine (M2M) communications.
Commercializing fixed and mobile next-generation access
As demand for broadband services continues to grow, operators are faced with pressure to invest. Yet they are also facing revenue pressure, with no certainty that expensive network upgrades will reverse the situation. Therefore, the business case built by operators to justify upgrades to LTE, fiber, or both will prove critical for their future commercial success and financial sustainability. Operators cannot afford to get it wrong. As such, we will continue to assess the next-generation business case in 2012, assessing both the cost and revenue implications for operators.
Furthermore, a number of “4G” and fiber deployments are now offering commercial services, and we will be providing case studies highlighting the key lessons and trends from around the world. On one side of the business case equation, we will use live examples to examine how operators are minimizing the financial burden of network upgrades, such as through network sharing and open access. On the other, we will be assessing how operators are packaging, presenting, and selling their next-generation services, particularly in markets with burgeoning next-generation access competition.
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