For the telecom industry, 2013 will be a continuation of the “interesting times” that we have seen in 2012. The past year has seen slowing economic growth as a result of the continuing debt crisis in the developed world. This has been unevenly distributed, with stronger-than average growth in the BRIC countries, MEA and developing Asia-Pacific, but much weaker or even negative growth in North America, Europe and developed Asia-Pacific. This pattern is reflected in mobile connections growth, which will slow to 7% in 2013, with emerging markets accounting for 89% of net additions. However, mobile broadband connections will grow by a more respectable 27% and LTE connections will increase by 150%. Fiber connections will grow by 28%.
Telecom capital intensity will remain flat and operating expenses will continue to come under pressure. To manage these costs, telcos must ensure that they address the end-to-end customer experience, including assuring network quality and availability. It will be important to ensure that any burden to resolve technical shortcomings does not fall on customer service functions.
Key challenges for telcos will be how to monetize new business models, leverage customer data by investing in analytics and define their response to over-the-top players.
From a vendor perspective, Ericsson will be the most successful traditional network infrastructure vendor due to its mobile radio access network and core portfolio, as well as its growing software and services offerings. However, Huawei and Cisco are also well positioned. All vendors will have to deal with the encroachment of software providers in core telecoms software stacks.
On the device side, companies that are integrating devices and services (such as Microsoft, Apple and Samsung) will be in the strongest position to capitalize on growth. Android OS and Samsung will pull further ahead in the platform and device markets respectively in 2013.
1. Global mobile connections growth is expected to slow to 7% in 2013. Growth highlights include:
–Emerging markets will account for 89% of net additions.
–Mobile broadband connections will grow by 27%.
–LTE connections will increase by 150%, while fiber will grow by 28%.
2. Telecom capital intensity will remain flat, and [operating expenses] will continue to come under pressure. To manage these costs, telcos must ensure that they:
–Address the end-to-end customer experience, including assuring network quality and availability.
–Ensure that any burden to resolve technical shortcomings does not fall on customer service functions.
–Telcos need to monetize new business models, leverage customer data by investing in analytics and define their response to over-the-top players.
3. In the enterprise market in 2013:
–The impact of the full-scale rollout of unified communications-as-a-service will begin to be felt.
–Operators will take a new approach to M2M, with more partnering to deliver services.
–Mobility strategies will be extended to “bring your own device,” with telcos supporting a range of mobility deployment strategies.
–Tier-two players will bid for smaller IT service deals with enterprises, meaning that tier-one operators will need to position themselves accordingly.
4. Wholesale carriers will continue to face declining revenues and margins as a result of domestic regulation and intense competition.
5. The regulation and policy priorities for national regulatory authorities and governments include:
–Ensuring the appropriate treatment of OTT players.
–Evolving interconnect regimes to encompass alternative charging principles once mobile termination rates fall to fixed call termination levels.
–Identifying more spectrum for mobile.
–Reviewing plans for ubiquitous broadband.
6. Technology trends:
–The LTE-to-HSPA rollout ratio will continue to shift in favor of LTE.
–Small-cell product deployments are expected to accelerate in second half of 2013.
–Laser for 100G will be the largest growth segment in the components sector in 2013.
7. Supplier performance:
–Ericsson will be the most successful traditional network infrastructure vendor due to its mobile radio access network and core portfolio, as well as its growing software and services offerings.
–Huawei and Cisco are also well positioned.
–All vendors will have to deal with the encroachment of software providers in core telecoms software stacks.
8. Devices:
–Companies that are integrating devices and services (such as Microsoft, Apple and Samsung) will be in the strongest position to capitalize on growth in the devices market.
–Android OS and Samsung will pull further ahead in the platform and device markets respectively in 2013.
