Thursday, 28 May 2009
I'm not going to point any fingers here as everyone's about as bad as everyone else. My dissection of individual MNOs' offerings is reserved for the piece I'll be publishing via Analysys Mason in the next week or two. It'll be called "MNOs must differentiate SME/SOHO mobile broadband propositions" or words to that effect. I'll also include some detailed recommendations about how to do it. For instance SME/SOHO plans should make use of some or all of the following: time-based pricing, sharer plans, bundled WiFi, dedicated customer care, additional service features and ultimately differentiated grade of service.
Tuesday, 26 May 2009
Swedish mobile operators Telia Sonera, Telenor, Tele2 and 3 have sought to head of this criticism by agreeing to a set of guidlines about how they can promote their mobile broadband speeds. As of 1 September they will promote the 'practical maximum' rather than the 'theoretical maximum'.
The speeds are as follows:
- 3G - (384Mbit/s) can be advertised as 0.3Mbit/s (surely that's the same!)
- Turbo 3G (3.6Mbit/s) can be advertised as 3Mbit/s
- Turbo 3G (7.2Mbit/s) can be advertised as 6Mbit/s
- Turbo 3G (14.4Mbit/s) can be advertised as 10Mbit/s
- Turbo 3G (21 Mbit/s) can be advertised as 16 Mbit/s
Friday, 22 May 2009
With increasing pressure on the RAN it's critical for MNOs to manage the bandwidth demand of their subscribers, which makes pricing all the more important. There should be a lively discussion, helped by representatives of all the top mobile broadband operators including T-Mobile, 3, Vodafone, Mobilkom and Orange.
Thursday, 21 May 2009
It looks like Vodafone UK is going roaming crazy. Having shaken things up with the abolition of roaming charges for voice across 35 markets it is turning its attention to MBB. According to an article in ISPReview VF UK is scrapping its current international tariffs, the £60/month Euro Travel and the £95/month World Travel, which carry 200MB of data, due to "lack of take up". I'll wait with interest to see what they'll replace them with.
Vodafone seems to be one of the few operators that's actually paying attention to the enterprise MBB market in the UK at the moment. A few days ago I commented on their revision of their standard enterprise tariff. Everyone else seems to have forgotten about the good old businessman in pursuit of the burgeoning consumer market. A lot of that is to do with the fact that all those good old businessmen are abandoning the expensive business tariffs and "consumerising", or "choosing the cheaper option" as I prefer to call it. As a result, signing up a business user doesn't generate a lot more revenue than a consumer and they tend to be more difficult to get.
What's required, of course, is some way to differentiate the business offering to get those price insensitive users to pay more. The obvious option is differentiated grade of service, but that will be a few years down the line. It'll be necessary though. In the meantime, MNOs need to look at features that business users appreciate. Roaming is clearly one and it could do with a revamp.
Over the next 3 months I'll be focusing quite a bit on both enterprise MBB and the ways to differentiate MBB services. Keep an eye out for the reports.
Wednesday, 20 May 2009
Tuesday, 19 May 2009
- Europe: organic revenue down 1.7% reflecting economic issues and increased competition. EBITDA down 1.1 percentage points.
- Africa and Eastern Europe: Organic revenue of only 3.9%. Strong revenue growth at Vodacom offset by problems in Romania and Turkey, the sick man of Vodafone.
- Asia-Pac and Middle East – 19% pro forma increase in revenue, but lower growth expected in future and a reduced EBITDA margin.
- Verizon Wireless – Revenue up 10.5%. Now contributing 30% of the group’s adjusted profit. It seems the decision to hold on to VZW has been vindicated.
- Data revenue - increased from £2.1 billion to £3 billion, accounting for 8% of revenue, up from 6.4% the previous year. Notable because of the changing mix of subscribers, i.e. proportionately more revenue coming from emerging markets.
So, the figures don't look that great, but, the prospects are actually quite reasonable, with some interesting initiatives. At least, they’re talking the right language: acceleration of the £1bn cost reductions announced last year, new roaming business unit to exploit opportunities at a group level, new mobile data application development initiatives, extension of SuperFlat tariffs (which seem particularly appropriate to the current environment) to markets beyond Germany, and looking to exploit strength in the enterprise space.
As noted in my post yesterday, Vodafone needs to leverage its scale. It’s been good at doing that in terms of branding, but not much on the services side. It’s a shame it’s taken so long, but better late than never.
A few other issues also cropped up during discussions. It’s wait-and-see on LTE and they’re pleased to benefit from the learnings of Verizon when they deploy next year. There are no acquisition plans although they’ll keep an eye out. There aren’t many really distressed assets out there to hoover up although. they might look at opportunities as they come up. More focus on moves that can create value independent of acquisition, e.g. merger with 3 Australia.
Monday, 18 May 2009
- Removal of roaming charges. Link here. From 1st June until 31st August contract and prepay users will pay no roaming fees to make calls from 35 countries (i.e. those where VF is present). Yes, that's "no roaming fees". New cheap international call charges will also apply. A trial run in preparation for EU legislation? Or a more fundamental shift in strategy to exploit scale?
- New application development framework. Link here. A new developer-friendly central point of contact for developing applications for the whole Vodafone group and more access to APIs, such as location-based elements. Lower rev share too. Clearly a strike back against the recent flurry of apps stores and one that plays to Vodafone's advantages of scale, access to critical user data, such as location and availability of secure billing channel. I was tempted to refer to this as a new apps store, as many other commentator has, except that VF has had an app store since 2002. It's called Vodafone Live!
- Mobile advertising rolled out to 18 countries. Link here. They'll keep on rolling out mobile advertising, as it represents a significant revenue opportunity, although to be honest, probably not for 3-4 years.
- New enterprise mobile broadband tariffs. Link here. Much less earth shattering, but good that they're giving attention to an oft-neglected and potentially very profitable segment. Their counterparts seem to think that simply repackaging consumer tariffs for enterprise is enough. It's not. It's £18 for 5GB, but the removal of OOB charges makes for a more predictable tariff.
Over the course of the last 12 months I've been talking to MNOs a lot about mobile data opportunities. Put very simply the opportunity is in 3 parts: access, advertising and applications. With these announcements Vodafone has acted aggressively on all of these. Furthermore it seems that Vodafone is finally taking advantage of its scale, particularly with the international roaming offer. Thumbs up.
Of course, if I was being cynical I'd suspect that tomorrow's results won't be too good and this is an effort to distract attention from that. We'll see tomorrow!
I'll be writing at more length on these developments as part of the Analysys Mason research programmes.
Friday, 15 May 2009
I’ve spent most of this week in Kiev (or should that be Kyiv?) talking to mobile network operators and various other interested parties. There’s a unique set of circumstances that makes it an interesting case study for mobile broadband. There’s only one UMTS licence awarded, to Ukrtelekom, incumbent PTO and now greenfield 3G operator. Meanwhile the other mobile operators are becoming increasingly frustrated, and rightly so, by the government dragging its heels over allocating the other 3G spectrum. This has had a real impact on 3G deployment as the economic downturn has hit the local currency hard with the result that infrastructure has become significantly more expensive. So the delays have had a possibly permanent impact on the deployment of UMTS.
As a result of the lack of 3G infrastructure is a very underdeveloped market for mobile broadband. Particularly depressing given the relative lack of fixed-line infrastructure. DSL is hampered by poor fixed line infrastructure. However, fibre-to-the-building deployments, both legal and questionable, are going ahead fairly rapidly. Kiev, for instance, is a city of tower blocks and fibre is a good way of addressing user demand.
So, does this leave mobile operators high and dry? Not at all. It just means that they have to be more creative. One operator, MTS, has reused its old NMT-450 spectrum for CDMA 1X-EVDO Rev A and deployed a mobile broadband (i.e. no voice) service using that spectrum. The others are squeezing the 2G network as much as they can.
Of course, they’re still crying out for more spectrum but given the current exchange rate it’ll be expensive to deploy mobile broadband. So we expect them – when the 3G licences are finally awarded – to focus on dense urban areas.
Despite all the problems, we’re fairly bullish about their potential. As outlined in the report Mobile broadband in Europe: forecasts and analysis 2009–2014 we’re expecting 10% penetration by 2014 and continuing growth after that.
Tuesday, 12 May 2009
Friday, 8 May 2009
Wednesday, 6 May 2009
A football match was played as part of the entertainment, with Exeter running out 1-0 winners over Rotherham United, courtesy of a Richard Logan header in the 71st minute. As a result of the win Exeter achieved promotion to League 1, but clearly all the Exonians were really there to celebrate the switchover.
Tuesday, 5 May 2009
The basis for the FT speculation was a comment by Rene Obermann that "We feel the UK market is competitive, and consolidation would do good for that market". True. A maturing market naturally consolidates. The question is how that is achieved?
At the network layer we're already seeing it, thanks to network sharing deals such as the MBNL jv between 3 and T-Mobile and outsourcing deals of which there have been many recently. Effectively this reduces the number of networks from 5 to 3 or 4. This makes operator level consolidation increasingly unlikely. If network operations are consolidated and outsourced, MNO operations focus on sales and marketing, creating "service providers" (SPs). There's certainly room for more than 3 or 4 SPs in any market.
The issue then is segmentation. MNOs/SPs tend to focus most of their attention on the same segment, high-end consumers, but in a very homogenous way. For there to be room for all the SPs they need to rethink their target segments, whether they be sub-segments of high-end consumers, or a different group altogether.