Informa Telecoms & Media’s Analysts have identified eight key themes to look out for at this year’s Mobile World Congress event in Barcelona.
• 4G – Dario Talmesio
4G will account for just 1.9% of global mobile connections by end-2013; US, Japan and South Korea continue to lead the way but finally Europe will make an assertive push into LTE. It is only by end-2017 that 4G will exceed 10% of global connections.
But is 4G making money? Arguably not enough. 4G needs smarter pricing to make business sense of these vast investments. The features are there – capacity, latency, speed – and new pricing paradigms are surfacing but in future we need more imaginative approaches, including monetization of OTT services.
• Healthcare – Sheridan Nye
Over 70% of the world’s leading MNOs are investing in mhealth services, according to Informa’s Enterprise Verticals Activity Monitor. But when will these investments pay off? So far, health-sector regulation and financial incentives have failed to keep pace with technology. In contrast, consumers are already downloading thousands of “fitness and wellness” apps to their smartphones. But will consumers accept the MNO brand in the context of personal health? Instead, should operators exploit their enabling expertise in security and aggregation of mhealth data?
• Digital services – Mark Newman
Telecoms operators are pursuing a number of different strategies to develop new revenue streams from digital services. They include M2M, cloud services, OTT communications and media and a whole range of different vertical sectors. But can operators acquire the skills and develop the business models to generate revenues beyond connectivity? Informa Telecoms & Media estimates that telecoms operators generated US$20 billion in revenues from digital services in 2012, equivalent to just 2% of the total global mobile operator revenues.
• Augmented reality – Andy Castonguay
In the last two years, augmented reality (AR) has evolved from being an experimental technology to a potential element of differentiation for device makers, advertisers and print media. With substantial backing from industry heavyweights Qualcomm, HP and Intel, the top AR platforms Vuforia, Aurasma and Layar continue to lead the field in implementation and technical prowess. With radical improvements in self-publishing, tools from Aurasma and Layar are making it easier to generate AR content, print media has become a hotbed of AR activity and an important platform for educating consumers about AR and its many benefits. With Vuforia and Aurasma leading the way with cloud-based AR image-recognition capabilities, the scale and functionality of AR in 2013 is poised for a hot growth year and greater adoption across the globe.
• Wi-Fi -Thomas Wehmeier
It almost certainly won’t be mentioned in presentations or be visible on stands at the show, but in snatched conversations on the floor and in private meeting rooms, doubts about the role that Wi-Fi plays in supporting mobile data monetization strategies will start to emerge. What is the impact of a seemingly unstoppable transition to free-to-end-user Wi-Fi on users’ perceived value of Internet access? What impact is Wi-Fi having on user willingness to pay for bigger data plans or to deliberately avoid incurring (lucrative) overage charges? And what impact does the migration to 4G LTE have when the typical experience, on today’s under-utilized networks, is typically demonstrably superior to the average hotspot?
Whatever the answer to these questions, there is no doubt that the relentless march of Wi-Fi will carry on regardless. Too many players with too much at stake remained too committed to growing the Wi-Fi ecosystem for its position as the primary form of Internet connectivity to be anything other than cemented, both in the hearts of operators and vendors and, importantly, in the hearts of venue owners and users. An interesting debate – with definite winners and losers – is starting to take shape.
• M2M – Jamie Moss
It is a fact that the M2M market is increasing by leaps and bounds. However, as it is coming from such a low base, even modest gains in the number of M2M connections will translate into impressive growth rates. Huge figures have also circulated throughout the industry, laying claim to the “value” of M2M and the “Internet of Things”. But the bulk of any value will be in the form of extra profitability realized by the businesses that (hopefully) integrate connectivity into their products and services. When Turkcell lobbied for M2M SIMs to become exempt from connection taxes in Turkey, it was the contribution that M2M had made to the national economy through savings that spearheaded its argument, not the dollar value in new business that M2M represented for the carrier.
M2M might not alter a business’s turnover so much as it does its margin. For M2M is usually about getting more from your existing business model, not forging a new one. So does this mean that there is no money in it for the carriers? It is a point of fact that carriers are a critical enabler: It is connectivity that defines M2M. The carriers’ role is horizontal, but they would like to be able to gain more from the vertical services as they emerge. The question for carriers is how to add value using the network and how to be more than a component in another company’s solution? Strategic acquisitions of M2M specialists, inter-carrier alliances, partnerships programs and “marketplaces” have all been attempts to find this value … 2013 will be an interesting year to watch for the first results.
• Devices – Dave McQueen
Tablones and phablets
There has been a growing trend by a number of handset vendors to make smartphones with large screens, often over 5.5 inches, which have been coined “phablets” (a smartphone/tablet hybrid). The assumption is that these devices have appeared owing to the emergence of mobile broadband, notably LTE, where the larger screen offers a better user experience for these faster services. But will their size and price suggest they will be forever linked to the high-end segment? And how will these larger smartphones manage to compete as they gravitate towards the 7-8 inch tablet segment, which is now also occupied by the Apple iPad mini?
The use of a Web-based operating system, using HTML 5, is starting to gain traction as variations from Samsung’s Tizen and Mozilla’s Firefox OS aim to create significant opportunities in the mobile market. The promise of low hardware requirements, a very cheap (and fast) application development environment (compared with a native development environment) and a huge Web-developer community suggests that these web-based OSs should prove successful. However, they are entering a handset market that is highly competitive. Will there be enough push behind these platforms and resources compared with other vendors to help drive scale? How will they aim to compete with the smartphone ecosystems already entrenched in the market? And will a lack of relationships with retailers and mobile operators stifle any potential for growth?
• Cloud – Camille Mendler
The race to the cloud continues: 75 telecom operators entered the cloud market in 2012, according to Informa’s Telecom Cloud Monitor. But for the 220 operators now selling cloud services around the world, going live is only the first hurdle. Creating a profitable service portfolio for consumers and small enterprises is the rising concern. Existing customer profiling and segmentation methods are not working. Informa’s analysis indicates that delivering cloud services beyond the boundaries of the home and the office offers a path to success.