Analysys Mason has identified the top ten emerging trends likely to dominate the telecom industry in 2013.
According to the analyst firm, in 2013, roll-out of the long-term-evolution (LTE) services will have a limited immediate economic impact, leading social media players will be more active in driving the growth of IP-based messaging services and smartphone penetration will continue to be slow.
Further, Analysis Mason predicts that Apple will continue to lose market share in the tablet space and the operators will focus on investing in voice over long-term-evolution (VoLTE).
The top 10 emerging trends include:
LTE arrives, but with limited immediate impact: In 2013, LTE will become a commercial reality in a large number of companies, but will have a limited economic impact in the next 12 months. Some European countries and emerging markets in Latin America are in the process of rolling out LTE networks. Meanwhile, developed markets such as South Korea will also start to deploy LTE 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 where the economy is facing a slowdown (such as 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 the next-generation fixed access technologies. It will only be a complementary service. This realisation by operators will help reduce the price of 3G/high speed packet access mobile broadband services.
The big switch-off will accelerate: 2013 will see operators increasingly focus on the ?big switch-off? ? a legacy mobile infrastructure for mobile network operators, copper networks and public switched telephone network for fixed operators. Operators are also likely to change their approach towards this. For example, one operator in South Korea has already switched off its 2G network.
Social media leaders to further shake up IP-based messaging: In 2012, operators responded to SMS cannibalisation by launching rich communication suite and e-services, which was followed by a number of ‘telco-over-the-top’ services. In the next 12 months, competition will further increase in this space with the entry of social media giants, such as Facebook. The revenue for a European operator from messaging services is expected to decline by 34 per cent in the next four years, from Euro 28 billion in 2011 to Euro 18.6 billion in 2017.
VoLTE investments to come into the spotlight: The first VoLTE service was rolled out in 2012. Though widespread commercial deployments are still some years away, operators will need to decide about the future of their voice services. Potential cost savings are currently driving investments in the IP-based multimedia services, but revenue implications are uncertain. Operators have to have a clearer vision as to how voice services should evolve in an LTE world. HyperText Markup Language5/Real-time Communication will further stimulate the debate about whether ‘voice is just an application’
Smartphone penetration growth rate to slow markedly: The smartphone market will continue to increase but the rate at which it increases will be markedly lower than in previous years. The annual global smartphone shipments will increase 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. It is expected to decline from 39 per cent in 2011 to 29 per cent in 2012. In 2013, this growth rate will decline further to 20 per cent. Both Android and iOS are expected to marginally increase their share of smartphone sales in the next 12 months globally. However, there will be a sharp fall in mobile phones operating on Symbian platform.
Apple?s market share to fall below 50 per cent in tablet space: As the tablet market continues to grow, Apple?s dominance in the tablet market will continue to decline. By the end of 2013, Apple?s share in the tablet market is expected to fall below 50 per cent by the end of 2013. Going ahead, Apple?s iPad mini is expected to have only a limited impact on sales numbers due to its high price point ($329 versus less than $200 for a Kindle Fire HD). Both Apple and Samsung lost market share in 2011-12 to other vendors such as HTC, Motorola, RIM and Sony. Content ecosystem 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 acquire non-Apple tablet users.
Multi-device subscription pricing to emerge: The selling prices of smartphones and tablets have been falling in the past five years; the average price of a smartphone has declined by Euro 300 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 $14?$85 per gigabyte.
Traditional TV under more pressure: OTT/Connected TV and non-linear TV will influence broadcasters/pay-TV and telecoms operators to re-think their strategies. The uptake of paid-for OTT video services to the TV in the US and Canada will more than double to 53.1 million households between 2012 and 2017, representing 37.4 per cent of households.
The take-up of paid-for OTT video services in Europe will increase to an estimated 2.3 million households in 2012, representing a mere 0.7 per cent of households. OTT video services are expected to increase to 32.2 million, or 10 per cent of households, in 2017. In comparison to the growth in US 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.
Wi-Fi to the rescue: Wi-Fi-based solutions will address mobile operators? needs for dense urban wireless coverage and capacity. However, factors such as limited backhaul availability, standards maturity and solution costs will affect major deployments until late 2013 or early 2014. LTE 2600 will emerge as a the 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. Wi-Fi solutions based on HotSpot 2.0 and devices supporting Passpoint 2.0 will emerge in late 2013. This will help bridge the gap between cellular networks and the emerging carrier grade Wi-Fi service. Operators will also start to look at providing various grades of service including cellular, SP Wi-Fi and to help differentiate their service and brand as well as support monetisation of the wireless experience.
Operators in emerging markets come of age: Process transformation, opex and network cost optimisation will become major issues in emerging markets. This is so because the operators within these regions are coming of age with the growth in mobile penetration rates is slowing down. For example the penetration rates of active SIMs in some African and Middle Eastern countries like South Africa, Saudi Arabia, Morocco, and the United Arab Emirates, already exceeds 100 per cent of the population.
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