24Mar/150

In 2015, the key words of the Mobile World Congress were 5G, IoT, virtualization and LTE-U : PART 2

image accroche article MWC part 2

IoT : The Internet of Things

Connected objects were everywhere and IoT is now becoming the Internet of everything.

Connected cars

Connected cars attracted a lot of attention with connected vehicles on most of equipment manufacturers’ and MNOs’ booths.
Renault’s CEO made a keynote where he presented the timetable for assisted driving. According to Mr. Carlos Ghosn, despite their numerous initiatives and some acquisition rumours, Internet giants are not rivals to car manufacturers but allies, as they consider electric cars and they help car makers to promote electric cars.
Ford had even its own booth presenting the electric vehicles (both passenger and entreprise cars) with dedicated solutions. In the meantime, Vodafone presented a Porsche Panamera model equipped with its new Telematics solution since the Cobra acquisition.

Smart home

Smart is also getting traction in the IoT space. In the “innovation city” hall (space dedicated to the connected objects), through the connectedhouseAT&T offering (Digital life) where the home could control through the smartphone and even through the connected car (equipped with an AT&T SIM card). When approaching the home, the car can trigger the opening of gate by itself for instance (pre-programmed distance).

connectedthingsWearables

Several watches and smart objects were also present on the different booths. Only AT&T provides cellular connected wearable on its booth, including the TIMEX and Samsung Gear S.

Alternative technologies

While 5G is already in the tracks, very low throughput network technologies are also under the spotlights. After the recent release of its 100 MEUR fundraising campaign among telecom operators, Sigfox was also on everyone’s lips at the MWC. Among the main new shareholders, Telefonica confirmed its strategic investment and its willingness to integrate the technology into its portfolio to address additional verticals and applications.

Alliances

The GMA (Global M2M Association) also announced a strategic collaboration with Gemalto and Ericsson to provide a Multi-Domestic Service based on a single SIM (using the eUICC technology) helping global enterprises (chiefly from the automotive and consumer electronics segments) capitalize on the growth of connected devices.

Growing market but still key challenges though

During his keynote, if AT&T Wireless CEO predicted that the smart phone will be the remote control of everything in the next few years, he also pointed out the key challenges to address in order to make the IoT market grow significantly:
•    Security
•    Privacy concerns
•    Effortless (ease of use)

Privacy

privacylogoData about devices and their users is generated in real-time, often by default and without the user being aware or having choice (especially for free apps). There is a need for a different approach to giving users transparency, choice and control over their data and privacy.

Generally user has a single choice : accept or not using the service, there should be gradual approach (like sharing some id attributes but not all of them).
Privacy could be a competitive stick for service providers, as users are becoming more aware of privacy.

Facebook in emerging countries

fbFacebook has launched Facebook zero in partnership with mobile operators (Millicom, Telenor, Airtel): data use is free for a limited period, and after that operators can charge data.

•    Airtel: “Operators and Facebook are like the beauty and the beast, but the beast (facebook) is becoming more human nowadays”.  Airtel was reluctant to introduce Facebook because of VoIP threat. Is looking at it like the “boiling milk”.
•    Millicom, Telenor: have seen ARPU rise thanks to facebook launching, very promising for them.
•    Wikipedia has the same approach of “Wikipedia zero”, dealing with operator to provide data access for free.

Financial inclusion

Banks, such as Master Card, provide a global and interoperable solutions. Those systems needs public-private partnerships. Hong Leong Islamic Bank Berhad has launched a solution in Malaysia.

More informations about IDATE's expertise and events :

www.idate.org      www.digiworldsummit.com      www.digiworldweek.com

23Mar/150

In 2015, the key words of the Mobile World Congress were 5G, IoT, virtualization and LTE-U : PART 1

MWC infog

As for each edition, IDATE has been Analyst partner of the Mobile World Congress. A fantastic opportunity for our analysts and experts to interview many professionals coming from their Mobile planet to Barcelona for this intense and tremendous week.

5G Concept

Even though the concept of 5G is still very much under discussion (videos from KT, Huawei presented during conferences), NGMN (next generation mobile networks) Alliance published its 5G white paper which can be seen as the mobile operators “wish list” for 5G. Nonetheless, 5G is scheduled for 2020. Early trials should arrive in 2018, with projects scheduled for the Winter Olympic games in South Korea (4G became real in 2010’s, 3G in 2000’s). Key advantages of 5G over 4G would be a much lower latency (1ms compared to 40 ms in 4G and 100 ms with 3G), the capacity to connect billions of devices, faster response that will boost services like augmented reality, self driving cars and online gaming. Huawei mentioned that 5G should reach 10 Gbps (7 minutes to download a movie with 4G, 6 s with 5G).

5G should better take into account specific requests of vertical markets (healthcare, automotive, energy, government, city management, manufacturing and public transportation) and better manage the Internet of Things.

Equipment suppliers showed first demos of 5G air interface using millimetric bands (70 GHz - Nokia) and 15 GHz (Ericsson). New air interface techniques were proposed by Huawei with the non-orthogonal access technology based on Sparse Code Multiple Access (SCMA), and Filtered-Orthogonal Frequency Division Multiplexing (F-OFDM).

With tvisuel principal idate MWC v2he 5GPPP (Public Private Partnership), Europe is trying to accelerate developments of 5G with fundings of €700 million for R&D. It is expected that the industry will invest five times this amount. According to the 5GPPP, 5G should be based upon a HetNet (heterogeneous network) supporting various radio access technologies and frequency bands ranging from sub-1 GHz bands to 100 GHz. Various traffic profiles will have to be supported:

 

•    Low speed-low energy for IoT sensors
•    High speeds for video services
•    Very low latency profile for mission critical services such as PPDR (Public Protection and Disaster Relief) and for transportation issues

Google will soon become a MVNO

Google confirmed during the MWC that the group is negotiating MVNO agreements with the US mobile operators. Light details on Google plans so far. Further information scheduled for months to come. Nova is not expected to compete directly against US MNOs. In addition, Google do not want to launch a network at scale.
The Google MVNO will only work with the Nexus6. “The focus of Google’s network could be on connecting devices other than phones, as watches, cars and other devices increasingly will include mobile connectivity features”.Mobile Identity

Different methods of identification and authentication, each suited to particular transaction types (from access to social network to official ID) ; biometric authentication as a new solution.
•    Digital identity card exists in Estonia (with digital authentication), biometric card exists in middle east and Africa (Algeria, South Africa)
•    Mobile authentication is a challenge for mobile operators, but the market is far from mass-market: demand is not ready for official ID authentication on mobile, standards are needed, as well as regulation.Mobile Id could be a leapfrog technology in emerging countries where people don’t even have identity papers, and have a mobile phone.
If mobile operators don’t manage to be positioned on this market, banks or social networks could.

Virtualization

PICTO VIRTUANetwork Function Virtualization (NFV) appeared last year during MWC and is now close to commercial implementation by mobile operators. Telefonica demonstrated a full network together with ALU and HP. It will integrate a vRAN, vCDN, vEPC and vIMS.
A first implementation of vRAN was presented by China Mobile which is collaborating with Alcatel-Lucent and Intel on Cloud-RAN, which is seen as a first step towards virtual RAN. NTT Docomo is working with NEC on virtualization of the core network (EPC).

LTE-U

LTELOGO2LTE-U technology is important and was present on many vendors’ booths. It will give free access to additional spectrum in the 5 GHz band currently used by Wifi. This will provide SDL (supplementary downlink) capability, providing extra capacity for downlink traffic, especially video. LBT (Listen Before Talk), the specific function which will allow smooth compatibility between Wifi and LTE in the 5 GHz band will be included in 3GPP Release 13 expected to be adopted in Q3 2016.
LTE and Wifi carriers can also be combined in order to provide higher throughputs but in that case, the benefits of LTE higher spectrum efficiency are not present.

 

27Feb/150

LTE trends

Frederic PUJOL
Radio Technologies & Spectrum Practice Manager - IDATE

IDATE announces 2.3 billion LTE subscriptions worldwide by the end of 2018, generating revenue of close to €700 billion

 

IDATE forecasts than more than 500 million LTE subscriptions worldwide, representing 7% of total SIM cards (Q4 2014):
- Top three countries for LTE subscriptions: USA, Japan, South Korea at end of 2013 and June 2014.
- China jumps into fourth place mid-2014, expected to rank second at end 2014.
- USA represented 45% of the total in 2013 and will account for 38% end 2014.

Total LTE revenues are expected to more than double in 2014. They tripled in 2013:
- IDATE expects 160 billion EUR in 2014, 11% of total mobile revenues.

Country leaders have now reached (or almost reached) nationwide LTE population coverage: Japan, Korea, Hong Kong, Singapore, Australia and USA.

By the end of 2018 we forecast, overall, there will be more than two billion LTE subscriptions worldwide (2.3 billion) or 29% of total SIM cards.

In terms of technology, 2014 is the year of:
- LTE-LTE-Advanced features deployment, especially carrier aggregation (LTE-A launched in June 2013 by SK Telecom);
- VoLTE services introduction;
- First LTE broadcast deployment.

LTE subscription forecasts, 2014-2018 (million)

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Top 10 LTE markets by subscriber numbers (million, estimates in italics), mid-2014

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LTE coverage (% of the population, mid-2014)

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Source: IDATE, in World LTE market, December 2014

IDATE publishes a range of reports on the core issues surrounding mobile market technologies and services around the globe:

  • VoLTE
  • LTE USA
  • World Mobile Spectrum
  • New Frequency Band Spectrum
  • World LTE market
  • M2M
  • Wearables
  • Mobile Advertising
Filed under: LTE, Mobile No Comments
5Jan/150

Le Digiworld Summit 2014 in drawings

ouverture DWS14

The 2014 digiworld summit "drawn from life" by Aurélie Bordenave, alias Léely. Discover all the strong moments. (texts are in french or in english)

 

 

 

 

Global introduction

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Plenary: Business models, Rethinking the telcos business models in the 5G era

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Keynote : Smart Glasses

 

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Business models: Rethinking the telcos business models in the 5G era

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Disruptive innovations: one step towards 5G

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Smart City & Mobile living

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Seminar "TV everywhere"

tv-everywhere
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Seminar : "Business models: M2M & Internet of Things - Smarter objects, smarter processes"

m2m-internet-of-things

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Business models: Narrowing the gap between explosive usage and limited ad revenues
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Europe on the rebound ?

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TV & facing Mobility

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>> Retrouvez tous les dessins d'Aurélie Bordenave durant le Digiworld Summit 2014 sur Flickr.

>> Découvrez le travail d'Aurélie Bordenave alias Léely sur son site.

 

16Dec/140

Mobile Communication: Wrap up from DigiWorld Summit 2014

digiworldsummit-2014-Mobility-reloaded

by Yves Gassot, CEO, IDATE  
& Didier Pouillot, Director of the Telecom Strategy Business Unit, IDATE

The 2014 DigiWorld Summit sessions devoted to telecoms gave off a certain serene, so as not to say optimistic vibe. Was it because of the huge numbers that each one trotted out, whether talking about mobile customer growth (over 9 billion users by the end of the decade), the exploding Internet of Things (80 billion connected things in 2020, according to IDATE), mobile traffic growth (triple that of wireline traffic) or the speeds expected from Advanced LTE (up to 100 times faster than 3G)...

 

5G needs to put Europe back on the map

So the watchwords for all of the speakers at this year’s Summit were erasing the past decade which, for a great many telcos, has been synonymous with shrinking revenue and margins in Europe’s five biggest markets (EU-5) since 2008, as underscored by Didier Pouillot, Head of IDATE’s Telecom Strategies Business Unit. Synonymous too with spending well below their counterparts in the US, and lagging behind in 4G rollouts, even though real progress has been made in terms of coverage. So the gauntlet has been thrown down: Europe needs to be back on the map, and amongst the world’s telecom hardware and service leaders by the time the 5G era rolls around, i.e. by around 2020, even if the South Koreans in 2018 and the Japanese in 2020 will be keen to show off their chops at the Winter and Summer Olympics, respectively.

From a technical standpoint, the race to superfast mobile appears to be well out of the gate. Frédéric Pujol, Head of IDATE’s Wireless Business Unit, listed the assets of LTE, which has now become a global standard, and how LTE Advanced will move things even further along with frequency aggregation, HetNets (Heterogeneous Networks) that will make it easier to manage small cells, optimised multicast protocols (especially important knowing that video is expected to account for more than 50% of traffic), eMBMS, etc. Although far from being standardised, 5G will take datarates higher still, delivering speeds in the Gigabit/s. But, as several speakers pointed out, the future will also mean multi-network access, taking into consideration the particular constraints surrounding the deployment of the Internet of Things, for instance, as not all objects are connected via cellular networks – but rather via NFC or low frequency radio networks, like the ones deployed by Sigfox.
What alternative wireless technologies can do… while waiting for 5G

There was a lot of talk about Wi-Fi in Montpellier. There was Silano Lo, CEO of Ruckus Wireless, one of Silicon Valley’s top equipment suppliers. She spoke in particular about the progress made by new generations of Wi-Fi, which will be fully integrated into telcos’ infrastructure, so subscribers will no longer have to login and enter a password. She also reminded us that Wi-Fi was a central part of

Comcast and other American cable companies’ strategies, both as way to secure customer loyalty and enter the wireless market. These strategies are also found in Europe, with companies like Liberty Global and BT, with Wi-Fi enabling wireline telcos to operate as MVNOs, combining homespots and hotspots, while minimising the amount of traffic being relayed over cellular infrastructure.
Speakers on the various panels offered nuanced answers to the question of whether high-speed and ultra high-speed mobile access will come to replace wireline access. All came together to emphasise that, in emerging economies, mobile broadband will be the main channel for Internet growth, even if Christophe Wilhelm, Senior VP Strategy & Innovation for Thales Alenia Space, did stress that satellite-based – both geostationary and in medium and low-earth orbit (MEO/LEO) – and unconventional solutions such as balloons and even drones, will also have a role to play.

The superfast revolution will require a stronger core

For Michel Combes, CEO of Alcatel-Lucent, the debate is no longer about whether fixed or mobile systems will emerge triumphant: convergent infrastructures and ultra high-speed mobile will no longer be able to avoid public and private small cell architectures, pulling optical fibre closer and closer to user premises. For Mr Combes, the revolution is not confined to superfast access but, more fundamentally, will go by way of concepts such as SDN (Software Defined Network) and virtualisation with NFV (Network Function Virtualisation), which will give network operators access to control and command functionalities that ensure the networks’ reliability and security. If the smartphone has become the measuring stick of innovation for consumers, and the cloud revolution has begun, the network revolution that connects one to the other, is still to come.

Telcos on the offensive: working to change regulation and business models

Naturally, telecom carriers also talked about how to get back on their feet. Following through on what Michel Combes had to say, Telefónica’s Global Head of Public Strategies and Regulatory affairs, Carlos Lopez-Blanco, and Deputy CEO of Orange, Pierre Louette, want to see Europe deliver a strategic action plan in the very near future. More specifically, Carlos Lopez-Blanco shared his wishlist for the new Commission:
•    more relaxed regulation that leaves greater leeway for commercial negotiations;
•    increased harmonisation in the application of the regulatory framework, and emergence of a European regulator;
•    a level playing field that puts an end to the asymmetry in the regulation imposed on telcos and the laissez-faire attitude towards the dominant positions enjoyed by OTT companies.

This last demand goes beyond sector-specific regulation, however. By the same token, how the ongoing consolidation in Europe plays out is largely in the hands of anti-trust authorities. But the representatives of Telefónica and Orange did not simply express their frustration with regulatory constraints. They also sketched the future of their business models, emphasising the promise they see in the development of 4G and mobile data traffic, in the cloud and M2M, along with the potential offered by partnerships with content providers and verticals, while not excluding the possibility of offering exclusive products and their own OTT services. This was an opportunity for them to make clear that their support of an open Internet must not relegate them to the status of dumb pipe.

To go further…

Our videos :
> Pierre Louette, Deputy CEO d’Orange
> Frédéric Pujol, directeur de la Business unit Wireless de l’IDATE

> Michel de Rosen’s présentation (Eutelsat ) 

The presentations :
> Didier Pouillot, Director of the Telecom Strategy Business Unit, IDATE, « rethinking the telcos business model »
> Jaehyun YEO, Senior Researcher, KISDI, "Future Networks: Challenges & Opportunities"
> Ambroise Popper, VP/GM M2M BU, Sequans Communications, "Closing Keynote " 

> Carlos LOPEZ, Telefónica, "Rethinking the Telcos business models in the age of 5G "
> Soline Olszanski, VP Strategy & Innovation, Hub One, "4G Critical and Professional"

Our study :
> World Network Optimisation Technologies 

> World LTE Market
> World FTTx Markets

30Sep/140

Light operators: nearer the ‘medium-heavy’ point of the scale, rather than the virtually asset-less

PENNINGS Christoph
Christoph PENNINGS
Head of Regulation Practice, DigiWorld by IDATE

Maturing, and putting on weight

We have examined different aspects of the 'light operator' phenomenon. Light operators and their business model are heavily influenced by sector specific regulation. The purpose is also to provide an inventory of the different points of contact between the two. We also discuss the evolution of 'light' approaches in the mobile industry, exploring the different kinds of MVNO and the wholesale operator model. Regarding the fixed sector, we examine the opportunities for light operators arising from the use of next-generation access networks and delivers examples of light operators on open access networks. Finally, we take a brief look at other forms of light operator, such as Wi-Fi operators and over-the-top players providing voice and messaging services.

The future of ‘light operators’ is therefore probably nearer the ‘medium-heavy’ point of the scale, rather than the virtually asset-less.

Light operators have often been a catalyst for change

Light operators have had a tremendous impact on telecoms markets, but their traditional business models have not turned out to be very sustainable in the long run. Light operators have often been a catalyst for change (as with low-cost models, or niche segments) but have also often failed to reap the benefits of their innovations as network operators took back their power. Light operators pursuing a pure low-cost approach will find themselves squeezed between network operators' own low-cost sub-brands and abundant bundles as well as OTT's providing 'free' voice and messaging services.

Nevertheless, light operators continue to exist in their niches catering to the needs of well-identified market segments.
The rollout of new NGA and 4G networks creates a number new opportunities for light operators, too. However, open access networks are present in a limited number of markets only, such as the Netherlands and Sweden in Europe and in the Asia-Pacific region. Sector-specific regulation also plays an important role in the market and this will continue for the foreseeable future, creating business opportunities for asset-light business models.

Light operators and the MVNO phenomenon

Looking at the mobile market and certain open access players, it seems that ‘light operators’ investing in their ability to differentiate their services from their host operators are faring better than their resale-focused peers. Full MVNOs such as Telenet in Belgium or Virgin Mobile in France have become serious challengers in their respective markets. The same holds for fixed ISPs of the likes of Myrepublic or Bredband2. By investing in a limited infrastructure rather than being a pure reseller, they are able to propose a service with some unique characteristics without having to go to the effort of rolling out a full network. Asset-lighter bitstream models with a handover closer to the end user than in the case of a very light ISP but still staying short of the capillarity of an access network are certainly the safest bet for challengers in the fixed market.

If you want to learn more about Light operators

Filed under: LTE, Mobile, Telecom No Comments
18Sep/140

Digiworld Summit 2014 : Mobility reloaded, we ain’t seen nothing yet!

GASSOT Yves


Yves Gassot
Directeur Général, IDATE

‘Mobility reloaded” will be the central theme of the 36th annual DigiWorld Summit.

Following through on ‘‘Game Changers’’ (2012) and ‘‘Digital Gold Mines’’ (2013), this year’s theme will allow us to further our examination of current and future upheavals in the digital economy by exploring the issues from a specific angle: mobility and its impact on user behaviour and on the value chain for telecoms, TV, advertising, the Internet, gaming, smart cities, etc.

  • What innovations can we expect from mobile Internet disruption?
  • Are fixed and mobile superfast access interchangeable?
  • What new players and business models will emerge from the Internet of Things and mobile advertising?
  • Will mobile devices turn TV into a one-to-one business?
  • How can Europe get back in the game?

IDATE Chairman François Barrault points out that, ‘If the cloud, big data and the Internet of things are clearly the major disruptions looming on the horizon, the momentum today lies in the mantra: mobility first!

IDATE CEO, Yves Gassot, details the key points of this year’s programme: ‘What began with the swift commercial success of 4G is segueing into the spectacular technological leaps expected from LTE-advanced and, beyond that, the prospect of 5G, the widespread adoption of software-driven networking (SDN)… But questions also linger over the accelerated pace of the migration from the fixed to the mobile Internet, spurred by the massive popularity of smartphones and tablets, coupled with the surge of emerging economies. It goes without saying that a great many stakeholders are being affected by these massive changes in the landscape, which we have chosen to explore from three angles: How revenue is progressing for mobile operators and other players, from M2M to the Internet of things and beyond; How the massively mobile Internet will affect the advertising ecosystem; and how TV industry players are positioning themselves now that video accounts for an increasingly large share of mobile traffic’.

The 36th annual DigiWorld Summit will run from 18 to 20 November in Montpellier, France, and play host to a panel of international industry luminaries who will share their views with more than 1,300 participants from 30 countries. IDATE analysts will lend their expertise to the sessions that will be moderated by Digiworld Institute members.

DigiworldSummit-Programm2014-600px

 

DigiWorld Week: the DigiWorld Summit broadens its horizons

This year’s DigiWorld Summit will kick off DigiWorld Week: a new initiative from IDATE and its key partners to explore the many facets of the digital society’s core economic issues. A series of exciting events will be taking place from 16 to 21 November on either side of the core two-day Summit:

  • The Connected Things Forum
  • The Game Summit
  • MIG (Montpellier In Game)
  • Industry Oracles
  • Workshops
  • Economic Club on m-payment

> Find the latest programme updates at www.digiworldweek.com

 

More than 140 speakers on hand

This year, we are delighted to welcome speakers from the four corners of the globe, come to share their views on the future of mobility:

    • Mikael BÄCK, Vice President Global Strategy & Portfolio Management of Ericsson will share some of the chief findings of the “Mobility report”.
    • Jean-Michel FOURNIER, CEO & Co-Founder of BitGym, a San Francisco-based start-up and winner of the prestigious Auggie Award at AWE 2014, will talk about the “quantified self” phenomenon.
    • Kayvan MIRZA, CEO & Co-Founder of Optinvent will unveil his approach to new generation smart glasses.
    • Patrick PELATA, EVP & Chief Automotive Officer of Salesforce.com will speak with Thierry VIADIEU, New Mobility Program Director from Renault, about the future of connected cars.
    • Christophe WILLEM, Senior VP of Strategy & Marketing at Thales Alenia Space, will tell us if drones, balloons and mini-satellites offer viable solutions for connecting huge swaths of the population to the Internet.
    • Michel COMBES, CEO of Alcatel-Lucent will close the “Road to 5G” session, whose speakers include Selina LO, President & CEO of Ruckus Wireless, and Atsushi TAKESHITA, President & CEO of DOCOMO Communication Laboratories Europe.
    • Pierre LOUETTE, Deputy CEO of Orange and Carlos LOPEZ-BLANCO, Global Head Public & Corporate Affairs for Telefonica, will discuss how telco business models will evolve in Europe, against the backdrop of market consolidation.
    • Laurent SOLLY, Facebook’s Managing Director France, and Benny ARBEL, Founder & CEO of MyThings, a rising star in retargeting, will discuss the challenges that advertising faces as it makes the transition to mobile.
    • Luc JULIA, VP & Innovation Fellow of Samsung and Co-authored Apple Siri's core patents, Erick TINICO, Director of Mobility at AT&T, one of the world’s most advanced telcos and Axel HANSMANN, Gemalto’s VP of M2M Strategy & Marketing, will share their analysis of new business models for M2M and the IoT.
    • Fu SHENG, CEO of Cheetah Mobile, a growing mobile Internet powerhouse in China, with 340 million users.
    • Abigail KHANNA, Head of Digital and Future Media Business Development at the BBC, Steve McCAFFERY, GM & SVP of sales for Europe Arris, Eric SCHERER, Director of Future Media, France Télévisions, and Valery GERFAUD, General Manager, M6 Web, will explore what the future holds for television, now that mobile devices are becoming users’ screen of choice.
    • Guillaume de FONDAUMIERE, Co-CEO of Quantic Dream, Susan O’CONNOR, a writer whose script credits include the games BioShock 1 & 2, Far Cry 2, Tomb Raider and Star Wars 1313, along with Charles CECIL, co-founder of Revolution Software, creator of Broken Sword, are among our video game Oracles.
    • Meng LI, Director of China Telecom’s Mobile Business Department Europe, will talk to us about the development outlook for mobile in its various forms in the world’s biggest market.
    • Jean-Ludovic SILICANI will talk about his time as Chairman of France’s telecoms and postal regulator, ARCEP, and share his insights into key issues going forward.
    • Vincent LE STRADIC, Managing Director of Lazard, will provide a financier’s perspective on the health of Europe’s digital economy. And…
  • Axelle LEMAIRE, French Ministry of State for Digital Affairs will deliver the Summit’s closing remarks.

See the complet list of speakers.

31Jul/140

A game-changing trio for the telecoms landscape

GASSOT Yves
Yves Gassot
CEO, IDATE

Increased competition, a forced rethink of pricing models and the devastating impact of the economic crisis have weakened Europe’s once thriving telecoms sector

Europe’s telecommunications sector has been the stage for a growing number of merger and acquisition deals in recent months. Deals that are clearly posing a conundrum for regulators and anti-trust authorities, resulting in especially long investigations, and controversial “remedies” for those deals that have been given the green light.

Despite which, virtually all of the parties have by now reached the conclusion that consolidation is inexorable, if not desirable. The sector’s main players have never fully recovered from the aftermath of the Internet bubble and the debt levels that ensued. The increased competition ushered in by new entrants, pricing models that have been destabilised by the arrival of Internet companies offering rival (voice, messaging and video) products, the devastating impact that the economic crisis has had on the countries of southern Europe since 2008… together have weakened Europe’s once thriving telecoms sector. In concrete terms, this has meant a 12.5% drop in revenue for the top five European markets over the past five years, a dramatic decrease in EBITDA (earnings before interest, tax, depreciation and amortisation) and, quite naturally under these conditions, in lower per capita spending on new generation access networks (fibre, LTE) than in the United States.

So consolidation appears to be a natural response to the situation, a way to put an end to the price wars and stabilise margins. Infrastructure sharing schemes may precede or be part of this consolidation, but unlikely to take its place. If these schemes can provide an interesting means of reducing costs, they can also allow price wars to drag on. Unfortunately, most of these consolidation deals are taking place inside national markets.

Once the dust from these mergers has settled, European telcos’ margins improved, and the harmonisation of regulation progressed as Mr Junker has said he hopes it will, it is not hard to imagine that the next stage of market consolidation will be cross-border and beyond. We need to remember that one of the arguments put forth when opening the telecommunications sector up to competition was the ability to create a single European market, and to enable the emergence of a handful of pan-European carriers. The stakes here are high: even if the synergies to be had from a cross-border merger are less obvious, size alone will no doubt have an impact on operators’ efficiency and their ability to invest and innovate. We should also emphasise that the creation of a large handful of telcos operating in most EU markets – replacing today’s one hundred or so national telcos, but also competing against a number of operators that target a very particular clientele – will in no way reduce the choice available to consumers. So we should probably just accept the fact of having fewer national operators, and in turn enjoy more meaningful competition – in a vaster, European-scale marketplace – which extends beyond merely price points.

Indeed, the real challenge for operators is not to engage in a game of industrial Monopoly and to grow and grow just for the sake of it. Instead, they need to ready themselves as best they can to handle three difficult and dramatic changes. The first is one that must force telcos to continue to improve their productivity and agility, to be able to respond to a fast-changing environment. Even if price wars are currently a trap, it is nevertheless also true that the telecom sector is among those most able to pass digital-driven productivity gains onto consumers, and to generate the means to sustain needed investments. The second change is an accelerate rate of convergence between fixed and mobile infrastructures, spurred by the advent of superfast access. The mobile Internet of tomorrow will be fibre networks’ biggest client. The third game changer is a major one. Namely the increasing influence of software and data on the sector, which will require operators to control quality of service parameters and customer relations in real time.

If the effervescence of the digital ecosystem is today characterised above all by innovative over-the-top (OTT) start-ups, the telecoms sector should not be viewed as the last dinosaur standing, or something akin to CDs being made obsolete by streaming. Regardless of how the future plays out, money will still need to be spent on the networks and the access link in the Internet value chain, with a solid profit outlook in the offing. Something that Europe, which today has no major global Internet platform to its name, would be unwise to overlook.

A paper published in the french newspaper Les Echos.fr 30 july 2014.

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10Jul/140

Fixed and mobile ultra-fast network rankings

CHAILLOU_Valérie Valérie CHAILLOU Head of Research, Telecoms Business Unit, IDATE

IDATE reveals global and European rankings

To mark the start of the 8th annual Assises du Très Haut Débit symposium, IDATE is releasing its ranking of countries that lead the way in ultra-fast fixed and mobile broadband subscriber numbers, in Europe and worldwide. An analysis and data culled directly from IDATE’s freshly updated FTTx and LTE global market watch, which examines hundreds of countries and operators.

Growing disparities in fixed ultra-fast broadband

At the end of 2013, ultra-fast broadband (UFB) access – i.e. with a throughput equal to or above 30 Mbps – represented 29% of all broadband connections worldwide. This marks real progress as the percentage stood at 22% just one year ago. FTTH/B is still the mostly widely deployed technology, accounting for 60% of UFB subscribers around the globe, followed by cablecos’ FTTx/D3.0 systems, which account for 29% of users, and VDSL for 11%. In terms of subscriber numbers, all UFB architectures combined, the United States is by far the global leader with 62.5 million subscribers at the end of 2013, compared to 42.4 million for China and 27 million for Japan. France is in eighth place with more than 2 million subscribers. Of course this ranking changes depending on the indicators that are taken into consideration, such UFB subscribers’ share of a country’s total broadband customer base. Here South Korea tops the ranks, ahead of the United States, Japan and China, with 66% – versus 64% for Japan, 60% for the United States and 22% for China. As to the technologies deployed, the US is the undisputed VDSL market leader with some 11 million subscribers, well ahead of the UK and its 2.1 million subscribers. The United States is also the world’s biggest FTTx/D3.0 market, with 42 million subscribers, again ahead of the UK which is home to 3.1 million subscribers, followed by Spain where competition between FTTH/B and FTTx/D3.0 is fierce.

Accelerate 4G rollouts

Meanwhile, LTE also continues to make tremendous strides. IDATE counts close to 212 million LTE subscribers around the world at the end of 2013, of which 190 million are located in just 10 countries. The revenue generated by these subscriptions tripled in 2013, to reach €68 billion or 6% of global mobile telephony revenue. The United States is the biggest LTE market with more than 100 million subscribers, or three times more than the number two market, Japan. France is in sixth place in terms of user numbers. There are several reasons for these huge disparities: telcos in the United States have far outspent their European counterparts on LTE rollouts (virtually double the Capex per capita), while in Japan and South Korea LTE is part of a strong ongoing industrial policy. Here, it is worth remembering that South Korea covered its entire population with LTE in just one year.

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23Jun/140

World Telecom Services : overview and projections

POUILLOT-Didier

Didier Pouillot
Head of the Telecom Strategy Business Unit

Mobile growth still strong with 6.6 billion subscribers worldwide at the end of 2013 and forecast to reach more than 8 billion by the end of 2018

 

IDATE, partner analyst at the LTE World Summit 2014 (23 to 25 June 2014 in Amsterdam) reveals the findings of its World telecom services watch.

After the trough of 2009 and hesitant growth in 2010, the global market has been growing at a moderate pace since 2011. Growth in 2013 stood at 2.4% “we have observed that, by and large, telecom services are recovering more slowly than the economy as a whole,” reports Didier Pouillot, head of IDATE’s Telecom Players & Markets Business Unit.

Now in a recovery phase, telecom markets in advanced countries are proving somewhat resilient, whereas in fast-developing markets the underlying momentum is coming from volume. This phenomenon is telling of a mature industry now driven more by demographics than economics. In Africa/the Middle East, for instance, the drop in regional GDP in 2009 (-6%) and its rebound in 2010 (+16%) had very little impact on telecom services growth rates which remained very high both years: +8% and +9%, respectively.

Revenue from telecom services

According to IDATE, global telecom services revenue will increase from €1,186 billion in 2013 to €1,341 billion in 2018, representing an average annual growth of 2.5%.
• Revenue from mobile services will grow by 17% between 2013 and 2018 (+3% a year on average), reaching €826 billion in 2018.
• Revenue generated data transmission and Internet access will enjoy more substantial growth (+24% between 2013 and 2018, i.e. an average +4% per annum), to reach €338 billion in 2018.
• Fixed telephony revenue will continue its sharp decline: -15% between 2013 and 2018, i.e. dropping by an average 3% a year, down to €177 billion in 2018.

More mobiles, more users

According to IDATE, the number of mobile customers worldwide should top the 8 billion mark by the end of 2018 (+21% in 5 years).
• The number of fixed Internet subscribers will grow more slowly (+18% between 2013 and 2018, +3% a year on average). The one billion mark is not expected to be reached before 2020.
• Traditional landlines continue to loose ground as VoIP and mobiles gain.

The spread of broadband

According to IDATE, the number of fixed broadband subscribers is expected to reach 858 million worldwide by 2018, for a penetration rate of 12% of the global population. The number of LTE customers is shooting up, and LTE-Advanced users are expected to increase swiftly in early adopter countries.
IDATE forecasts more than 1.3 billion LTE subscriptions worldwide by the end of 2017, generating a total €400 billion in revenue
Two major factors will work in broadband’s favour:
• The success of bundled offers (fixed telephony, VoIP, TV, mobile telephony) and the appetite for video applications.
• Telcos’ investments in migrating their infrastructures to mobile or fixed broadband.

Scalability of operators

• European operators are still in trouble, with a growth momentum that is running out of steam, despite strong investment needs
• North American telcos are benefiting from a solid growth rate at home, especially in the mobile market.
• If several major telcos from emerging countries continue to enjoy swift growth rates of close to or above 10% (Bharti Airtel, China Mobile, China Telecom, China Unicom), a number of them saw their growth flatten and tumble to virtually nil in 2013 (America Móvil, MTN, Oi, Vimpelcom). But margins remain high: EBITDA margins of between 30% and 40%, and even higher in some cases. Several of these operators are widely engaged in international expansion strategies.

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If you want to discover the study "World Telecom Services - Markets & Players.

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