Saturday, 22 December 2012

2013 Telecoms Predictions (Analysys Mason)

In 2013, roll-out of LTE services will have limited immediate economic impact, social media giants look set to stir up IP-based messaging services and smartphone penetration growth rates will slow considerably, according to Analysys Mason’s top telecoms predictions for the next 12 months. The company also predicts that Apple will continue to lose market share in the tablet space and the VoLTE investment case will come into the spotlight for operators.
 
1. LTE arrives, but with limited immediate impact: in 2013 LTE will become a commercial reality in many more countries, but will have limited economic impact in the next 12 months. Some European countries and emerging markets in Latin America are set to launch the network, as well as countries in South-East Asia via the Asia–Pacific band plan. Some developed markets such as South Korea will also start to deploy LTE-A and take advantage of features such as carrier aggregation to craft larger channels for higher-speed services.
However, the immediate economic impact of LTE will be limited in countries where it has been priced as a premium product and the economy remains sluggish (e.g. Italy and Spain). The industry will also realise that consumers are unwilling to pay a premium for LTE mobile broadband, and that this service will not compete with next-generation fixed access on anything other than a complementary basis. The effect will be to push down the price of 3G/HSPA mobile broadband services.

2. The ‘big switch-off’ will accelerate: 2013 will see growing operator focus on ‘the big switch-off’ – legacy mobile infrastructure for mobile network operators, copper networks and PSTN for fixed operators. Approaches to this will be varied. One operator in South Korea, for example, has already switched off its 2G network.

3. Social media giants to further shake up IP-based messaging: in 2012, operators responded to SMS cannibalisation by launching RCS-e, which was followed by a number of ‘telco-OTT’ services. In the next 12 months, competition will heat up further as social media giants such as Facebook move in. Analysys Mason forecasts that European operator revenue from messaging will decline by 34% in the next four years, from EUR28 billion in 2011 to EUR18.6 billion in 2017.

4. VoLTE investment case to come into the spotlight: the first voice-over-LTE (VoLTE) services came to market in 2012. Though widespread commercial deployments are still some way off, operators will need to make some tough decisions about the future of their voice services. Potential cost savings are currently driving the IMS investment case, but revenue implications are uncertain, and a clear vision for how voice services should evolve in an LTE world has yet to be articulated. HTML5/WebRTC will further stimulate the debate about whether ‘voice is just an application’.

5. Smartphone penetration growth rate to slow markedly: the smartphone market will continue to grow but the rate at which it grows will be markedly slower than in previous years. The number of annual global smartphone shipments will grow from 691 million in 2012 to 869 million in 2013. However, the rate of growth in the rate of new smartphone connections will significantly decline: from 39% in 2011 to 29% in 2012. In 2013, this growth rate will decline further to 20%.
Analysys Mason predicts continued, incremental development of the smartphone OS market share situation. Both Android and iOS are predicted to marginally grow their share of smartphone sales in the next 12 months globally (from 56.4% to 58.1% and 21.5% to 22% respectively). However, Symbian’s market share for sales will fall from 5.9% to 2.7%, reaching zero in 2016.

6. Apple to fall below 50% market share for tablet sales: as the tablet market continues to grow, Apple’s dominance of it will continue to decline, faster than many expect. Apple will fall below 50% market share for tablets by the end of 2013, with the iPad mini expected to have only a limited impact on sales numbers due to its high price point (USD329 versus less than USD200 for a Kindle Fire HD). Both Apple and Samsung lost market share in 2011-12 to the benefit of other vendors such as HTC, Motorola, RIM and Sony.
Content ecosystems for tablets will be a key "differentiator" in 2013 and as important a feature for tablets as the quality and size of the screen or processing power. Vendors who focus on expanding their content line-up and international footprint will be most likely to capture non-Apple tablet users.

7. Multi-device subscription pricing to emerge: selling prices for smartphones and tablets have been falling in the past five years; the average price of a smartphone has declined by EUR300 since 2007. This trend has supported increasing data penetration and the emergence of the multi-device user segment, which will result in many more operators launching multi-device subscription plans to capture additional revenue. This is particularly true for LTE subscriptions where per-gigabyte pricing covers a wide range of USD14–85 per gigabyte.

8. Traditional TV under more pressure: OTT/Connected TV and non-linear TV will continue to force broadcasters/pay-TV and telecoms operators to re-think their strategies. The take-up of paid-for OTT video services to the TV in the USA and Canada will more than double to 53.1 million households between 2012 and 2017, representing 37.4% of households.
The take-up of paid-for OTT video services in Europe will reach an estimated 2.3 million households in 2012, representing a mere 0.7% of households. We expect this to increase to 32.2 million, or 10% of households, in 2017. Compared with the USA and Canada, growth in Europe will continue to be constrained by a lower propensity to pay for video services, because of the widespread availability of high-quality free content from public broadcasters.

9. Wi-Fi to the rescue: small-cell/service-provider Wi-Fi solutions will address mobile operators’ needs for dense urban wireless coverage and capacity, but limited backhaul availability, standards maturity and solution costs will blunt major deployments until late 2013 or early 2014. LTE 2600 will emerge as a key option for small-cell spectrum gaining network and device support to address capacity needs of developed-market operators, complemented by growing 5GHz Wi-Fi providing improved Wi-Fi performance.
Service-provider Wi-Fi solutions based on HotSpot 2.0 and devices supporting Passpoint 2.0 will come to market in late 2013, helping to bridge the chasm between cellular networks and the emerging ‘carrier grade’ Wi-Fi service. Operators will also start to look at providing various grades of service: cellular, SP Wi-Fi and ‘Best Effort’ Wi-Fi to help differentiate their service and brand as well as support "monetisation" of the wireless experience.

10. Operators in emerging markets come of age: process transformation, opex and network cost optimization will become major issues in emerging markets as operators within these regions are coming of age and an apparently endless growth in mobile penetration rates is finally slowing down.
The penetration rates of active SIMs in some African and Middle Eastern countries, for example, already exceed 100% of the population (eg. South Africa, Saudi Arabia, Morocco, and the United Arab Emirates).

Source: http://4g-portal.com/2013-telecoms-predictions-from-analysys-mason

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