How to Succeed with Fixed–Mobile Convergence Alastair Brydon and Mark Heath
Transcription
How to Succeed with Fixed–Mobile Convergence Alastair Brydon and Mark Heath
How to Succeed with Fixed–Mobile Convergence Alastair Brydon and Mark Heath with Rupert Wood Edited by Sarah Peake Analysys Research Fixed Networks and Services Analysys Research Fixed Networks and Services The Acceleration of Fixed–Mobile Substitution in Western Europe: facts and figures online market intelligence service Seizing the Opportunities from Enterprise Mobility Business Data Services: growth opportunities and The Middle Eastern Mobile Market: trends and forecasts for Europe 2007–12 forecasts 2007–12 Prospects for Local Loop Unbundling and Bitstream The Future of the Global Wireless Industry: in Central and Eastern Europe scenarios for 2007–12 European Cable: strategies for success The World’s Top Ten Non-voice Services for Mobile Fixed–Mobile Convergence in the Enterprise Voice Operators Market Picocells and Femtocells: will indoor base stations Strategies for Selling More to SMEs: analysis of transform the telecoms industry? demand for broadband managed services and service Mobile Operator Strategies for Fixed Broadband bundles Strategies for MVNOs Opportunities for Non-traditional Players in Communications Markets Beyond Triple Play: forecasts for broadband valueadded services The Competitive Dynamics of DSL in Western Europe: prospects for local loop unbundling and Mobile Number Portability: strategies for operators and regulators Person-to-Person Mobile Messaging in Western Europe: forecasts and analysis 2006–11 Mobile Operator Performance: ARPU, churn, diversification and globalisation bitstream Next-Generation Telecoms IT Mobile Networks and Services Analysys Research Next-Generation Telecoms IT Analysys Research Mobile Networks and Services online market intelligence service online market intelligence service Billing and OSS Trends: the transition to telecoms IT The Mobile Marketing and Advertising Revolution The Next-Generation Bill: commercial and technical The Central and Eastern European Mobile Market: strategies trends and forecasts 2007–12 World Telecoms BSS and OSS Markets: trends and Quadruple-Play Bundling Strategies analysis The Western European Mobile Market: trends and forecasts 2007–12 Published by Analysys Research Limited • St Giles Court • 24 Castle Street • Cambridge • CB3 0AJ • UK Tel: +44 (0)1223 460600 • Fax: +44 (0)1223 452800 • Email: [email protected] • http://research.analysys.com Registered in England No. 3977996 © Analysys Research Limited 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the prior written permission of the publisher. ISBN 1 905495 50 1 September 2007 10 How to Succeed with Fixed–Mobile Convergence 2.5 If FMC initiatives are to succeed, there must be strong benefits for network operators Operators need to ensure that any FMC initiatives can produce strong, and quantifiable, business benefits for them. Commercial benefits that could be at the heart of a strong operator business case are: • • • • • cost reduction, for example by operating a single, highly efficient core network to support fixed and mobile services revenue from new services enhancement of market share through significant service differentiation, compared with fixed-only or mobile-only operators churn reduction economies of scope, for example by exploiting current spend on billing, customer services and advertising, or by adding FMC as an extra feature to an existing home gateway product. Without clearly defined business benefits, FMC may be a highly risky strategy and operators must not position FMC as the only means of achieving their objectives. They must consider alternative approaches to achieving their goals that may ultimately prove more effective, even if they are more radical. For example, it may be more effective for a fixed-only operator (such as BT in the UK) to acquire its own mobile operations than to invest heavily in FMC services that prove to be unattractive to customers. The key challenge for operators constructing an FMC business case is to make realistic assumptions. While it may be appealing to believe that a new FMC service is going to have a dramatic impact on the market, operators have to be realistic about the following points. • The true costs and difficulties of implementing an FMC solution. The business case should include not just the costs of technical solutions, but also the costs of marketing, promotion and distribution, which may be substantial, particularly for fixed-only or mobile-only operators that are moving beyond their core businesses. • The probable demand for FMC solutions. Operators have to compare the probable end-user benefits with any drawbacks that will diminish the appeal of an FMC solution in order to derive a realistic assessment of probable end-user demand. They need to take into account the fact that the majority of end users are happy with their existing services, and may not see the need to upgrade to an FMC solution. • The competitive situation. End users will not adopt an FMC solution simply because it is delivered in a clever technical way across fixed and mobile networks. They will be more concerned with the cost of the service and whether it meets their needs. In particular, operators must not underestimate the appeal of simpler, non-FMC solutions. 2: FMC can take different forms © Analysys Research Limited 2007 27 How to Succeed with Fixed–Mobile Convergence Figure 4.1: Decline in mobile voice spend per minute for selected countries, 1Q 2004 to 4Q 2006 [Source: Analysys Research, 2007] Average spend per minute (USD) 0.50 0.45 0.40 Austria Finland France Germany Spain UK 0.35 0.30 0.25 0.20 0.15 0.10 0.05 4Q 2006 3Q 2006 2Q 2006 1Q 2006 4Q 2005 3Q 2005 2Q 2005 1Q 2005 4Q 2004 3Q 2004 2Q 2004 1Q 2004 0.00 The decline in average spend per mobile minute will continue, as operators attempt to stimulate voice usage in order to maximise ARPU and drive FMS. Following the lead of the USA, there will be a proliferation of bundles of voice minutes, with generous allocations of any-time, any-network minutes. Home-zone tariffs will be used increasingly, and the introduction of femtocell indoor base stations will allow mobile operators to offer their customers cheap (or free) voice calls from within the home. Mobile pricing will fall to a sufficiently low level to be perceived as affordable and good value by a large proportion of mobile users. Consequently, the vast majority of calls will be made using mobile phones, despite the availability of cheaper fixed network alternatives. Mobile users will have little interest in seeking out cheaper alternatives, such as UMA-based services. The extensive deployment of 3G indoor base stations (commonly referred to as femtocells) could be the biggest barrier to the success of dual-mode handset services. 9 Femtocells may be deployed widely in the mobile industry within the next five years, as a means of providing indoor coverage in targeted areas for customers that need or want it. This will address the one major weakness of cellular-only FMS voice services, namely that indoor coverage can be poor, particularly from 3G networks. In general, 3G indoor coverage is significantly worse than that of 2G for many operators. However, widespread deployment of femtocells could substantially enhance indoor coverage – to more than match that 9 For detailed discussion of the role of indoor base stations, see Heath, M. and Brydon, A. with Wood, R., Picocells and Femtocells: will indoor base stations transform the telecoms industry?, Analysys Research (Cambridge, 2007). © Analysys Research Limited 2007 4: Cellular-only services will be more popular in many markets Market intelligence services from Analysys Research Analysys Research’s online market intelligence services help you keep track of the latest developments in major telecoms markets worldwide. All our services are regularly updated and include a sophisticated range of interactive search, benchmarking and download tools. • Analysys Research Fixed Networks and Services provides analysis of European operators and ISPs, country reports for 30 European markets, country market forecasts, commentary on industry trends, and a module on the broadband market. • Analysys Research Mobile Networks and Services provides insight into the strategies of key players worldwide, country reports for leading mobile markets, 3G status reports, country market forecasts and analysis of industry trends. • Analysys Research Next-Generation Telecoms IT includes a searchable contracts database, trends papers covering the latest issues in billing and OSS, and profiles of leading and up-andcoming vendors worldwide. Our Analyst Support package, which allows you direct consultation with our telecoms experts, is an ideal complement to your chosen market intelligence service. 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