Fixed-line telecoms services are facing a bleak 2009 and beyond, according to a new report Western European fixed telecoms: market sizings and forecasts 2008-2014 published by Analysys Mason.
"Rapidly saturating broadband means we are entering a new phase for fixed telecoms," argues lead author and principal analyst Rupert Wood. "The structural problems it faces are only exacerbated by the current economic downturn."
The report indicates that all three of the main retail lines of business of fixed telcos face problems. Broadband service revenue is slowing to low single-digit growth, and at the same time as the sector faces the need to invest to differentiate itself from an increasingly mobile internet, funding will be harder to justify. New services may stabilise the average revenue per line, but this is unlikely to grow.
Legacy voice has been in trouble for years, but the effect of an economic downturn will be to make revenue decline even faster relative to mobile. Unemployment and income squeeze will accelerate households' decisions to give up fixed voice services for good.
Enterprise telecoms revenues will decline as the economic downturn continues, although the report anticipates that, unlike in the main consumer areas, this will pick up again with an economic upturn.
The report forecasts a CAGR of -5.8 per cent for the retail fixed/broadband sector as a whole between 2008 and 2014, compared with -3.3 per cent for 2007-2008. In the traditional voice sector the report forecasts that retail revenue will decline by more than 50 per cent over the period.
"There aren't many bright spots," says Wood. "But having said that, paradoxically, more wireless services mean some very good network and wholesale service opportunities for fixed operators. Ultimately, though, fixed operators need to adapt to their gradually changing role in the converged telecoms value-chain, and focus their growth plans on monetising those non-substitutable areas of their assets: core and metro networks, IT and managed service provision. So as convergence kicks in, we should be hearing less of separate fixed-line operators, and more of integrated fixed-line operations."
Recycle for charity
The British Red Cross is appealing for people to recycle their old or unused mobile phones and support the work of the charity.
For every mobile phone recycled through the British Red Cross, regardless of brand, model or age, the organisation will receive three pounds sterling to help vulnerable people. "With three pounds we can provide one-week supply of rehydration salts for over 80 children in Africa," said Mark Astarita, Head of Fundraising at the British Red Cross.
Last Christmas, British households were inundated with an estimate 11 million new mobiles and as many ended up in cupboards and bins. "If they had been sent to a charity like the British Red Cross, they would have been turned into £33 million destined to help people in need. This would really make a difference," said Astarita. To send in an old handset and battery free of charge contact the British Red Cross for Mobile Phone Recycling freepost envelopes at: firstname.lastname@example.org
The Mobile Marketing Association (MMA) has published the fifth edition of its MMA International Journal of Mobile Marketing (IJMM). The issue touches on a number of important mobile marketing themes including engaging consumers through the mobile phone; exploring consumer perceptions, attitudes and behaviour, mobile search and advertising, technology and services, and network provider business strategy.
Specific articles include:
- Mobile advertising: does location-based advertising work?
- Mobile social networking: the brand at play in the circle of friends with mobile communities representing a strong opportunity for brands
- University students' attitudes toward mobile political communication
- Making search work for the mobile ecosystem: implications for operators, portals, advertisers and brands
- Mobile phone users' behaviours: the motivation factors of the mobile phone
- Sold on mobile advertising: effective wireless carrier mobile advertising and how to make it even more so
TM Forum and the Mobile Entertainment Forum (MEF) have launched of a joint initiative to address the estimated $5 billion in annual losses experienced by content suppliers across the mobile content value chain. These losses are attributable to incorrect reporting of revenue, and according to MEF calculations, comprise as much as 25 per cent of the $18 billion mobile content services market.
A combined team of TM Forum and MEF member companies will develop and publish work focused on sales reporting metrics. These metrics will enable service providers, content aggregators and providers to build a common understanding of the quality and quantity of services delivered, which in turn will improve the measure of revenue flows for these services across the value chain. This effort will build on existing MEF work designed to improve trust and profits across the value chain, and on TM Forum work related to business process and revenue leakage issues that reflect service provider perspectives.
Keith Willetts, chairman and CEO, TM Forum comments: "We believe this partnership will bring major benefits to both TM Forum and MEF members as well as accelerating cooperation between the content and service provider communities. The end goal is a win-win where the market for these sorts of services grows, losses are stemmed and profitability increases. It is critical that all the players in the value chain understand how to work together to tackle these challenges."
Creating, delivering and monetising content and digital media services are creating new demands on business models and operations. Together, the Forums will address these demands and work with their respective members to address real, bottom-line-affecting issues. The collaboration of these two organizations will ensure the solutions span the entire value chain. Over the longer term, the TM Forum and MEF will look at the bigger picture of lowering the cost of rolling out content and media services across mobile networks. The aim of this long-term view will be to stimulate the ability of different players to effectively trade together in an automated fashion and grow the overall market by enabling new joint market approaches.
SMS still king
A new report from Portio Research focused on mobile messaging suggests that SMS will continue to be the cash cow of mobile data revenues for some time to come. Traffic volumes and revenues continue to confound predictions and are expected to keep growing throughout the global economic downturn. Indeed the whole mobile messaging industry worth USD 130 billion in 2008 is predicted to be worth USD 224 billion by 2013, 60 per cent of non-voice service revenues. The report, Mobile Messaging Futures 2008 - 2013, ventures that there is nothing likely to stop continued growth of mobile messaging in the short term, driven by a cocktail of ubiquitous SMS, media rich MMS, enterprise based mobile email and youth conscious mobile IM.
SMS remains ‘king' because there is no cheap, easy to use alternative that will work with all phones and across all networks, it is loved the world over. Indeed in the US market, where SMS was a comparative slow starter, use per subscriber per month is now almost double the European average. In China average users send over 100 messages each month whereas the Filipinos continue to be the leading exponents with 755 messages each month.
Portio also predict a bright future for mobile email even though Japan is the only market where consumer mobile email has surpassed the use of SMS. Email is still the most popular form of business communication and the report suggests that mobile email users worldwide will quadruple from approximately a quarter of a billion users in 2008 to over a billion users by the end of 2013.
The rising star in the mobile messaging constellation is mobile instant messaging (MIM), which is still beset by the technical problems of interoperability. Portio however predict exponential growth in mobile IM users, surging from a worldwide total of 111 million users in 2008 to hit a massive 867 million users by the close of 2013. This massive growth in users will be accompanied by an equally impressive 5-fold increase in revenues from approximately USD 2.5 billion in 2008 to approximately USD 12.4 billion in 2013.