Head of Wireless Business Unit
Regional initiatives on 5G are already under way in Japan, South Korea, China, USA and Europe. Cooperation is also being established between these regional initiatives in order to foster R&D and standardization work.
Even though standardisation for 5G has not yet started, there is already a broad consensus on what kind of performance 5G technology will have to support.
• 5G will have to be suited to a whole raft of services, ranging from consumer services to any vertical market in the industry, going through public safety organisations. Whereas 4G was rather conceived purely as a mobile broadband technology, 5G will have to be flexible enough to allow new services or business models to emerge.
• 5G will thus have to function on any kind of spectrum, be it low or very high spectrum, shared, licensed or unlicensed. It will need to collaborate more easily with other technologies (terrestrial or not), perform perfectly in both densely-populated and rural areas, and operate in traditional cellular mode as well as in new mode, such as in mesh/relay mode when necessary.
• 5G will also have, of course, to be more spectrally efficient but also more energy efficient to allow new use cases, new devices or objects to emerge and communicate with the resources available. Together with energy efficiency, cost efficiency will play an important role in 5G.
• In terms of concrete specifications, METIS, the EU-funded project, defines 5G as a technology to support mobile data volumes 1,000 times higher per area; numbers of connected devices 10 to 100 times higher; typical user data rates 10 times to 100 times higher; battery life 10 times longer for low power MMC; and end-to-end latency five times lower.
5G will not just be about improved throughputs but about the good throughput for the right user, on average and not just in theory. Although 4G has improved throughputs quite a lot as compared to 3G, there is a sizeable difference between peak throughputs and average throughputs. As an example, with 5G, the target is to provide 50 Mbps connectivity everywhere, thus addressing both coverage and capacity issues.
The efforts to reach standardisation of 5G will begin with the Release 14 of LTE but will continue in further releases. The 3GPP has started to make plans for its upcoming standardisation with the submission of the technology to the IMT 2020 process in ITU-R. Under 3GPP plans, work on requirements should start by the end of 2015, lasting until end-2017, when proposals should begin for standardisation work to gradually start in the first half of 2018, lasting until 2020. This standardisation process should first enable 5G deployment below 6 GHz while the final specification will have to enable the support for all the candidate bands.
The IMT-2020 requires that the technology be submitted by June 2019 with a high-level description, and by October 2020 with a complete description. The first submission is aimed at enabling an initial evaluation of the technology against the IMT 2020 requirements. The initial plans of 3GPP are to have the technology in frozen stage by December 2019.
Looking further into details, the various initiatives worldwide do agree, relatively speaking, on the same roadmap to be followed. There should be an initial focus on mobile broadband use case in order to secure the transition between LTE and 5G since this is the main LTE use case.
In this first phase, the focus would be on lower frequencies but there does not seem to be any consensus on what ‘lower frequencies’ means. Some players – a minority of them, it should be said – consider that these development and standardisation efforts should focus on frequencies below 6 GHz while others, such as Ericsson, Nokia and Qualcomm, think that the frequency bands between 3 and 30-40 GHz should be addressed straight away in the first phase while the second phase would address the whole frequency range envisioned, i.e. from 1 GHz to 100 GHz.
Learn more about the nascent 5G framework in our in-depth market report
Directrice d'études, IDATE DigiWorld
What will the Internet look like in Africa and the Middle East?
The IDATE DigiWorld teams of experts have published the second edition of the special report exploring the ins and outs of the digital economy in Africa and the Middle East
By and large, Africa and the Middle East are experiencing the same market shifts that telecom services in the West have undergone over the past two decades, albeit in their own particular way: slowing growth rates due to a relative saturation of the mobile telephony market, which is the sector’s chief driving force, combined with often stiff competition that weighs on margins. And a body of users that still remains to be conquered who have more modest purchasing power than operators’ existing customers.
Sub-Saharan Africa: the world’s fastest growing Internet access market
Forecast average annual growth rates
Under these circumstances, the transition to mobile data services, thanks to expanding 3G coverage and the deployment of 4G, marks a natural and promising progression. We expect to see the strongest increase in Internet access of anywhere in the world, particularly in sub-Saharan Africa, both because these countries lag so far behind and because of growing demand amongst the local population. The availability of smartphones that are affordable for a large percentage of the population, combined with initiatives such as Zero rating for basic service bundles, are helping things along. As a result, high-speed mobile density could climb from 20% in 2015 to 44% in 2019. However, it is not yet certain that this growing Internet market will allow the region’s telecom services industry to maintain the roughly 5% annual growth rate that it did from 2010 to 2014. We must also factor in demographics and steady economic growth – which, although still not strong enough, is nonetheless substantial compared to what we are experiencing in Europe – along with other elements that should enable Africa, on the whole, to avoid the long slump that telcos in Europe have suffered.
In addition to outfitting cities with Internet access infrastructure, attention needs to be paid to – and original solutions devised for – rural areas that must not be overlooked, so that the pace of the population explosion in cities can be reined in.
There is no shortage of proof that Africa and the Middle East are capable of real innovation in multiple digital economy sectors
Faced with these imperatives, the ability to finance massive investments in 3G and 4G cellular network rollouts, in national and regional backbones, and in the equipment needed for businesses (optical and satellite connections in business parks and districts, cloud solutions) require operations to be optimised so that margins can improve. Outsourcing and sharing tower infrastructures, consolidation in markets with too many players with a tiny market share, initial and ongoing training of personnel, and the search for synergies with electricity supply programmes are among the core paths to advancement that businesses and public policies will likely focus on. As in other markets, the importance of stable and balanced regulation that establishes a strong interplay of competition policies and support for investment and innovation cannot be underestimated.
Evolution of fixed and mobile usage and density
Lastly, telecommunications policies do not exist independently of the social, economic and regulatory issues surrounding usage and the development of innovative online services. We already have proof that Africa and the Middle East are capable of innovation in a number of digital market sectors. Mobile payment and money transfer solutions, in a region where banking structures are often lacking, are among the most oft cited examples, along with applications devoted to development, education, sustainable farming, managing utilities (water, electricity), health and tourism.
But we also need to add e-commerce and entertainment to the list, thanks to the first video game hubs in South Africa in particular, and those that have ties to well established film and TV production conglomerates. The countries are not all progressing at the same pace, and not all enjoy the same political stability, but our optimism forces us to see positive signs in the clusters emerging in certain markets, in the first incubators, the trading and collaboration networks being forged at the regional level, in some instances with the support of Internet heavyweights from the West now staking a claim.
Mobile density in Africa & the Middle East
Head of radio technologies & spectrum practice, IDATE DigiWorld
IDATE has just released a report on “Mobile operators’ investments”
This paper, published with the support of Ericsson and Qualcomm, investigates the level of mobile revenues, investments (Capex) and usage in Europe, as well as the interrelation between those metrics. The study compares the EU5 (France, Germany, Italy, Spain and the UK) with the other world mobile leaders, namely the USA, Japan and South Korea.
The results show that Europe is falling behind other regions in the use of mobile technology to benefit businesses and consumers and may be jeopardizing the region’s future ability to fully take advantage of evolving wireless technologies. The relative decline of revenue in recent years for Mobile Network Operators (MNOs) appears to be due to policy decisions aimed at maximizing short-term consumer benefits at the expense of long-term investment incentives. The data suggest this strategy is backfiring. The lower revenues in Europe have deterred MNOs from investing, which in turn delays the roll-out of networks and the adoption of services by consumers. Consequently, the unit costs of some services to consumers are higher than in other regions.
Investment in mobile communication infrastructure creates local employment and significantly contributes to growth, as an enabling factor for the digitalisation of other industries.
The Digital Single Market initiative is an opportunity to adopt a pro-investment and pro-innovation mobile regulatory framework, enabling Europe to lead in mobile communication through its attractive market size, growth potential and technology expertise. The findings and data of this study suggest consumers, businesses and individual European economies will benefit from policy makers’ adoption of a balanced regulatory framework that encourages investment in mobile infrastructure and technologies.
DigiWorld Summit 2015
IDATE will contribute to the debate at the upcoming DigiWorld Summit on 17, 18 and 19 November (Montpellier): “Digital Infrastructure” with:
• Michel COMBES, COO, Altice
• Thierry BOHNOMME, Senior executive Vice President, Orange Business Group
• Santiago Fernandez VALBUENA, Group Strategy Officer, Telefonica
• Alain FERRASSE-PALE, President & Managing director, Nokia France
Information & Registration:
Director of the Innovation Business unit, IDATE
VOIP and instant messaging have not harmed EU telcos
IDATE has today published a new report, which shows:
• The introduction of VOIP and instant messaging have not harmed traditional European telcos and associated overall revenues
• In fact, there appears to be a small net benefit: losses to SMS revenues have been balanced by overall increases in revenue from data-tariffs -- driven by demand for services such as VOIP and instant messaging
• While there have undoubtedly been tough challenges for traditional telcos in Europe over the last 10 years, this report shows the biggest challenges have come from EU regulation and internal competition in the telecom industry, especially for voice calls (mobile termination, roaming, transition of telcos to managed VOIP, etc…)
The report does acknowledge that there has been some impact in two specific areas in Europe:
• In countries where SMS price was artificially high (in some cases more than 10 times the price of SMS in other European countries) the decline in SMS revenues was accelerated by instant messaging services, such as Whatsapp. However in countries where SMS has been cheaper or provided as part of an unlimited tariff, Whatsapp and other instant messaging services have had negligible impact on carrier revenues.
• VOIP calls have eaten into international voice calls but the relative losses here are small and in some cases the competing VOIP services have been provided by the carrier themselves.
> Written with financial support from Google, the report is available here.
> Indepth market elements can also be found in reports regurarly published in the DigiWorld Reasearh catalogue from IDATE: “Communication Services”
Head of radio technologies & spectrum practice, IDATE
Now mainstream for MNOs and key issue for smart city
Mobile data traffic is continuing to grow fast. To cope with the data surge, MNOs are in a very complicated situation, where they need both to provide improved coverage or capacity to customers and to proceed with great caution on spending. This latest IDATE report presents the state-of-the art of the small cell and Wifi opportunities to close the gap and highlights strategies at play. It also gives the flavour of future scenarios.
Wifi is not brand-new. It has been playing a key role in releasing network congestion for years because it is not expensive. Seamless connectivity and handover between cellular and Wifi are addressed carefully. Carrier Wifi solutions that promise an enhanced customer experience and security through Passpoint/Hotspot 2.0 are currently implemented by players. Wifi has also been widely adopted to provide voice services through Wifi calling, also known as VoWiFi.
All in all, small cell and carrier Wifi are needed for a smooth transition to 5G, scheduled at the earliest for 2020. IDATE forecasts the small cell market is at last close to take-off. We foresee a huge growth of the small cell market driven by a robust increase in mobile data traffic:
• Macrocell densification continues in Europe as population coverage has not yet reached the 95-100% range.
• Alongside macro cells, MNOs are increasingly relying on carrier Wifi and small cells to cope with mobile data surge in cost-cautious times. Small cells have extended beyond the first devices dedicated to residential use and moved to urban, enterprise and rural areas. Technical innovations facilitate the management of small cell interference with the macro network. Small cells give the opportunity to come closer to the user and to increase customer experience. They can be installed in street furniture, for instance.
• In this face-off between cellular and Wifi, different players want to take a share of the cake.
Wifi-first players appeared in 2014 in the USA with a disruptive proposition: customers are using primarily free Wifi and they switch to paid cellular when Wifi is not available.
With Wifi, cablecos are on the road to offer quad-play services. Mobile is both an additive strategy to grow into a new market segment and a defensive strategy to cement cable’s stronghold in households.
OTTs were very successful in creating innovative services and in expanding them to many different devices. With a 20 USD plan, Google Fi is able to threaten MNOs in the USA and to attract young price-sensitive customers. Apple was very successful in eating into MNO revenues with popular iPhone services.
Small cells as a strategic path to the smart city
Small cells can use existing street furniture such as lamp posts, billboards or bus stops to come closer to the customers: JCDecaux pioneered the concept of subsidizing public street furniture in exchange for rights to advertise. Installation can also be done on municipality furniture such as lighting poles and traffic lights: Philips promotes actively the LED technology. Supporting digital lamp posts, it signed a partnership with Ericsson to integrate Ericsson’s small cell equipment in lamp posts.
Towards hyper density and emergence of smart cities
Source: IDATE, Small cells and Wifi offloading, August 2015
Find out more information on "Small cells and Wifi offloading" in our dedicated market report
More informations about IDATE's expertise and events :
ICT industry players vs. the new disrupters
From 17 to 19 November 2015, the 37th annual DigiWorld Summit will bring together 140 top-tier speakers from around the world to Montpellier, to share their views with the more than 1,200 participants from over 25 countries. French Tech will also be in the spotlight during the 2nd annual DigiWorld Week and at the inaugural DigiWorld Awards.
For IDATE Chairman, François Barrault, the theme of “Digital-First” – which was chosen in concert with DigiWorld Institute members – “refers to the tremendous rise of digital technologies in the business world, and huge changes in consumer behaviours. This astonishing acceleration is upsetting the status quo and shaking up the traditional economy, paving the way for new business models ushered in by the digital economy”.
Supervising the programme is IDATE CEO, Yves Gassot, drawing on IDATE consultants’ knowledge and expertise. “Once again this year,” says Mr Gassot, “the participants coming to Montpellier will get an invaluable, detailed snapshot of all of the latest digital industry events, thanks to the plenary sessions and the many forums, and to a large and prestigious panel of speakers from Europe, the United States and China who will be on hand to debate the multifarious questions raised by the ongoing digital revolution”:
• What are the promises of this new age of knowledge? with Jimmy WALES, Founder, Wikipedia
• How is the Internet changing the travel industry? with Peter VERHOEVEN, Managing Director EMEA, Booking.com and Alex SCHLEIFER, Head of Design, Airbnb
• How are veteran toy companies reacting to the video game invasion? with Dan JUDKINS, Head of Global Design and Development, Hasbro Inc.
• How are the Internet giants adjusting to the changes at work? with Carlo d'ASARO BIONDO, President EMEA strategic relationships, Google
• In with the new for a telco going global, with Michel COMBES, COO, Altice
• Is everything about to change for telcos? with Santiago Fernández VALBUENA, Group CSO, Telefónica
• What services will be attached to smart devices? with Bruno BARLET, Executive VP France, LEGRAND, Vincent CHAMPAIN, Operations Director, General Electric and Xavier BOIDEVEZI, VP Development & Digital, SEB
• Just how far can telcos go in helping their customers’ digital transformation? with Thierry BONHOMME, Senior Executive Vice President, Orange Business Services
• Do we really need new dedicated networks for the Internet of Things? with Geoff MULLIGAN, Chairman, LoRa Alliance and Ludovic LE MOAN, CEO, Sigfox
• Will the next Netflix come from China? with WEN Rui, Director of national Business Development, Youku Tudou
• Will new gen mobile TV be the new killer app for video? with Richard LUCQUET, Director, Business Development Technology Partnerships & Licensing, Oncue (Verizon)
• What does the future hold for a top, integrated telecom equipment supplier? Vincent PENG, President Western Europe, Huawei
• Does regulation need to adapt to Internet rules? with Fatima BARROS, Chair 2015, BEREC, Sébastien SORIANO, Chairman, ARCEP and Bruno LASSERRE, Chairman, French competition authority
• Can we count on digital markets to deliver a new period of growth? with Georg GRAETZ, Associate-Labour Markets, London Economics School and Jean-Hervé LORENZI, President, Cercle des Économistes
• As well as: Accenture, BBC, Bouygues Telecom, Deutsche Telekom, Ericsson, France Télévisions, edX, IBM,
• JC Decaux, NEST, Nokia, Qualcom Life, SEB, SNCF, Studio Bagel, Wilseed Studio…
The DigiWorld Summit programme has grown in 2015, to give us a chance to explore the ins and outs of the tremendous and wide-reaching effervescence at work in digital industries today: “This is why we are hosting the second annual DigiWorld Week, which was designed as a collaborative space for partner events. We will also be hosting the first ever DigiWorld Awards, which were created to identify and reward French talent abroad, with special guest, Axelle Lemaire, French Minister of State for the Digital Sector,” explains IDATE’ deputy CEO, Jean-Dominique Séval.
> View the complete programme at:http://digiworldsummit.com
DigiWorld Week 14 – 22 November 2015
IDATE expands on the two days of the DigiWorld Summit, and plays host to an exciting event-filled week. Delving deeper into the issues and shaking up ideas through symposiums, workshops, hackathons, exhibitions, festivals, master classes, digital café… Exploring a host of topics, including the cloud, IoT, eHealth, FX, digital arts, smart agriculture, management, …
> Get the latest news at: www.digiworldweek.com
DigiWorld Awards 19 November 2015
In partnership with Business France and French Tech, IDATE will be hosting the first annual DigiWorld Awards, recognising French digital start-ups (Equipment and devices, Networks and telecoms, Internet services and application, M2M and IoT…), created abroad. Awards will be in four categories: Africa and the Middle East – The Americas – Asia – Europe. The winning start-ups will be added to the international innovation support programmes being run by Accenture, Capgemini, Ericsson and Orange.
> For more details: http://www.digiworldsummit.com/awards
Follow us on Twitter: @DigiWorldIDATE
Senior Consultant, DigiWorld IDATE
"The Cellular device (Tablets & laptops) installed base wil top 370 million devices worldwide in 2020, up from 54 million in 2013."
Connected cellular device is a device equipped with Internet access through cellular networks (2.5G, 3G and 4G). Connectivity is provided through an embedded module in the device (the SIM card could be removable or not). The main consumer devices addressed here are tablets and laptops. Some opportunities could be seen at the enterprise level especially to meet executive mobility requirements.
Unlike Wifi-only, the cellular module provides connectivity ‘on the go’. 3G and 4G connectivity provides an always-on feature which allows application notification reception. With Wifi-only devices, the device turns automatically into a sleeping mode. 4G could appear as a game changer as, unlike 3G performance, 4G offers more bandwidth and better latency which even excels Wifi performance. Nevertheless, unlike Wifi, the cellular connectivity is not free of charge. The end user needs to contract a specific data plan. The other drawback is that, even without a subscription, cellular products are more expensive than Wifi-only products because the bill of material is more expensive. Moreover, Wifi connectivity is increasingly widespread, with a Wifi module embedded in each new connected consumer electronic product worldwide, and is offered for free in hotels, restaurants and even bars. In some airports, the user can have free access for a short period and can buy units of time of Wifi connectivity.
The connected device value chain is mainly composed by two groups of players: the connected device manufacturers (Samsung, Apple, Nexus, HP, Lenovo and Dell) and the mobile carriers providing innovative models (subsidy-based and even on-demand connectivity models). Module makers are also very involved in this segment. They provide specific modules and chiefly promote the embedded SIM-based module.
33% of the tabelts are cellular, in advanced markets
In terms of market adoption, cellular products are clearly gaining traction and several market estimates show that around 33% of the tablets are cellular, in advanced markets. The adoption varies a good deal from country to country. Cellular laptops are mainly driven by the professional market as it is more affordable to use rather than using dedicated dongles. Nevertheless, according to industry sources, their adoption is very limited, especially on the consumer side. The main issue here is that the laptop market (cellular or not) has been in decline since the launch of the first iPad. Hence, cellular laptop offerings are still restricted to the business market and almost non-existent for consumer market. Nevertheless, the last year has seen the withdrawal of key laptop offerings, showing thus the real barriers for this market take-off.
How to simulate market adoption?
To stimulate market adoption, numerous business models are being offered to the end user, depending on the distribution/sale channel. Both OEM and connectivity players provide connectivity offerings. Indeed, even OEM players are offering connectivity services through pure paid services or even provide fixed month traffic amount for a specific time after device purchase, with a top-up option obviously available. In the domain of MNOs, beyond this wholesale model, they currently provide traditional retail connectivity and the popular subsidised model. Some carriers also integrate these devices in their mobile share plan. Innovative data plans should also become popular in a near future, such as the on-demand connectivity based on embedded SIM technology, ideal for short-time journeys, weekending or vacationing abroad, for instance.
The cellular device installed base will top 370 million devices worldwide in 2020
The cellular device installed base will top 370 million devices worldwide in 2020, up from 54 million in 2013.
• In 2020, tablets will be the most popular cellular device around the world, with 90% of the total market. In 2020, this market will be led by the USA, followed by China. Germany is expected to lead the EU5 market.
• In 2020, the personal devices segment should reach 270 million units, representing 72% of the market (a stable breakdown compared to 2015) but they will take 55% of the total world connectivity market, as professional devices generate more traffic and related ARPU is therefore much higher.
Find out more on Cellular Devices in our dedicated market report
Senior Consultant, IDATE DigiWorld
Which pathways to broadband PPDR networks?
• Spectrum is at the heart of PPDR issues. Future usage for public protection and disaster relief (PPDR) worldwide is expected to concentrate on a limited number of frequencies. Allocation of broadband PPDR spectrum will be discussed at the WRC-15 in November 2015.
• 400 MHz frequencies are used for narrowband systems (TETRA, TETRAPOL, and P25) and considered for broadband.
• 800 MHz frequencies are used by narrowband networks in some countries or even regions and considered for broadband PPDR networks in some Asian countries.
• The 700 MHz band is the best candidate worldwide. In the USA, broadband PPDR spectrum was allocated in 2008 in the 700 MHz band. In Asia, the APT700 plan is likely to be adopted region wide; in terms of spectrum adoption in Europe and MEA, the question will be discussed at the WRC-15. The 698-703/753-758 MHz is a sub-band which could be made available for broadband PPDR at national level alongside SDL.
• TETRA-like narrowband technologies have served PPDR issues through dedicated PPDR networks using PPDR spectrum extremely well over the past decade. As these networks are by nature narrowband, they only support low data rates.
• There is now a clear global consensus that LTE will be the baseline technology for next-generation broadband PPDR networks. LTE still needs to be adapted: as from Release 12 of 3GPP LTE standards, LTE will be enhanced to meet public safety applications requirements. LTE extended capabilities are expected to be PPDR-friendly in future releases. Release 12 includes basic PPDR features. Its freeze, however, has been slightly postponed and some PPDR features formerly scheduled in Release 12 will be dealt with in Releases 13 and 14.
• A number of countries are actively working to provide a PPDR-friendly network to users. Several distinct initiatives are emerging around the world, ranging from commercial LTE networks using commercial spectrum on one side to dedicated PPDR networks using PPDR spectrum on the opposite side. Possibilities in between also exist, such as hardened LTE networks.
• Initiatives towards broadband PPDR systems are intensifying around the world. In Europe, a number of examples are flourishing, among them the Blue Light MVNO approach and the planned hardened LTE network pushed by the UK Home Office. On the other side of the Atlantic, the FCC had the opposite view and refused to use commercial networks. The First Responder Network Authority (FirstNet) is mandated to build a US-nationwide PPDR network with PPDR spectrum. Nevertheless, these latter two huge and complex initiatives are facing many hurdles.
Business models overview
Find out more about business models for PPDR, its status of allocations and PPDR over LTE-A
in our dedicated market report
Director of Telecom Economics Business Unit,
The announcement of the merger between Wind and Tre in Italy and the resulting shift from 4 down to 3 mobile operators for the country, confirms the telecom consolidation trend in Europe.
It takes two forms:
On one hand, with the multiplication of fixed-mobile consolidation operations, like the recent acquisition of mobile operator Base in Belgium by the cable operator Telenet. Other examples include the Orange-Jazztel operations in Spain, BT-EE in the UK, Numericable-SFR in France, and Vodafone-Ono, also in Spain.
On the other hand, we are seeing a concentration in the mobile sector, from 4 down to 3 operators, including the top 5 countries of the European Union (see map). Germany has already switched, with the merger between E-Plus and O2, the respective subsidiaries of KPN and Telefónica in 2014 after a long investigation by the European antitrust authorities. In the UK, the planned merger between Three, the local subsidiary of the Hong Kong group Hutchison Whampoa (also parent company of Tre in Italy) and O2, will likewise reduce the number of operators in the mobile industry from 4 to 3. In Spain, the sale of yoigo, proposed two years ago by TeliaSonera, was abandoned due to the lack of a buyer under terms that the Swedish group deemed reasonable but the Spanish market is de facto concentrated within three operators, the fourth and last arrival having just over 6% of the market (in number of customers), and having further declined since late 2014. But let’s recall that in France, conversely, Free Mobile has managed to win about 15% of customers (but some 8% of revenues) of the French market in three years. In this concerted process, the French market seems to be the only one continuing to swim against the current!
Beyond the five major European markets, a significant number of other member states of the European Union also have around 3 mobile operators, and only two in the case of Cyprus.
In total, of the 23 other countries, just half (12 in total) still have 4 or more operators. But for some (Denmark, Finland, Luxembourg, Sweden), the fourth operator has remained embryonic. Note also that while four countries still benefited from the launch of 4G to open the market for a new entrant (Bulgaria, the Netherlands, Romania and Slovakia), uncertainties remain on the sustainability of new licenses. Romania is also the only member state to host six operators. And finally, in Belgium, the allocation of a fourth 3G license to the Telenet-Voo consortium in 2011 was not finally acted upon: both protagonists relinquished their licenses in 2014! Finally, we should complete this inventory by highlighting the diversity of situations relating to MVNOs, in number and market share.
Nevertheless, with more than 100 licenses issued, the European market remains highly fragmented at Community level!
Number of mobile network operators (MNO) in the Member States of the European Union
More informations about IDATE's expertise and events :
TV Head of IDATE’s Innovation Business Unit, IDATE
Key IoT and OTT markets are expected to represent close to 245 billion EUR in 2014 and could reach 440 billion EUR in 2018.
Telcos are being challenged on their traditional markets, with just 2.5% of CAGR for the upcoming years. Competitive pressure is coming from OTT players but also from within the telecom industry itself, with strong price pressure on connectivity products. At the same time, the development of OTT and, to a lesser extent, of IoT, itself often seen as a major threat for telcos, is increasingly perceived as an opportunity.
Within IoT and OTT markets, a few key markets are driving growth. The biggest markets are by far cloud and advertising (respectively 64 and 93 billion EUR in 2014), with more than 15% of CAGR in the next four years for both markets, thanks to RTB, SaaS and IaaS solutions. Video is the smallest digital market with 18 billion EUR but it is also the fastest growing, thanks to advertising-based formats and SVOD. Financial services are already well developed thanks to carrier billing and e-commerce, while NFC payments remain very marginal. Finally, hopes remain high around cellular M2M markets and the numerous associated markets (notably smart metering, connected health and smart cities), but the overall revenue growth remains moderate despite a huge expansion in volume.
In total, key IoT and OTT markets are expected to represent close to 245 billion EUR in 2014 and could reach 440 billion EUR in 2018, close to one third of telecom markets. Telcos can potentially benefit from a rich number of opportunities around these new markets. They can position themselves as service providers, competing head to head with OTT providers. There are countless other opportunities as technology enablers providing some of the building blocks.
Find out more on telco initiatives in digital services and the opportunities levered thereby
in our dedicated market report