Europe needs a pro-investment mobile regulatory framework


Frédéric Pujol
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.

> Download the report for free


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:




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World Telecom Services Market


Didier Pouillot
Director of Telecom Economics Business Unit,

A market growing by 2% a year
that will reach 1,219 billion EUR in 2019



IDATE has released its latest forecasts for the entire global telecom services market in its twice-yearly benchmark report, drawing on fully refreshed datasets on telecom markets around the world.

 Head of IDATE’s Telecom Strategies Business Unit, Didier Pouillot, points out that, “by and large, the market is still under pressure, grappling with a combination of weak growth and a proliferation of offensive strategies working to accelerate the industry’s consolidation”.

According to IDATE, the global revenues from telecom services will grow from 1,097 billion in 2014 to 1,219 billion in 2019, representing an average annual growth of 2.1%.

Revenues from mobile services will grow by nearly 14% between 2014 and 2019 (+2.6% per year on average), reaching 751 billion EUR in 2019.

Revenues associated with data transmission and Internet will grow more strongly (+23% between 2014 and 2019, i.e. +4.2% per year on average), to reach 316 billion EUR in 2019.

The turnover of fixed telephony will continue to decline significantly (-15% between 2014 and 2019, i.e. a decline of 3.2% per year on average), to be at

152 billion EUR in 2018.

Everyone wants to go mobile

According to IDATE, the number of mobile customers worldwide should top the 8 billion mark by the end of 2018 (+16% compared with end of 2014) and increase by a further 200 million the following year (+19% between the end of 2014 and the end of 2019).

With global penetration more than 100% in 2014, subscriber growth is expected to gradually slow down over the next few years.

The number of fixed Internet subscribers is increasing at roughly the same pace, but customer numbers are eight times smaller. The one billion mark is not expected to be reached before 2020.

Traditional landlines continue to loose ground as VoIP and mobile gain ground.

 The spread of broadband

According to IDATE, the number of fixed broadband subscribers is expected to reach 900 million worldwide by the end of 2019. The number of LTE customers is shooting up, with services based on carrier aggregation no longer being limited to just the more developed countries. Three major factors will play in favour of the spread of broadband:

The success of bundled offers (fixed telephony, VoIP, TV, mobile telephony) and the appetite for video applications.

The investment of telecom operators in the migration of their infrastructures to mobile or fixed broadband.

The comfort provided by ultra-fast mobile broadband and the new uses it enables.

Disparate performances from operators in emerging countries

The top telcos in emerging countries experienced a slower rate of growth for their revenues in 2014, with the notable exception of América Móvil. China’s three telcos are reporting stagnant revenues, and China Unicom actually posted a 3.5% decrease. Their margins are come in line with industry standards: between 30% and 40% of EBITDA margins.

Several of these operators are actively engaged in an international expansion into Africa and Latin America, but also into advanced markets, particularly in Europe.

European operators in trouble

European operators continue to suffer. Virtually all of them, except for Deutsche Telekom and Telenor, saw their revenues shrink once again in 2014.

Their spending on LTE and superfast fixed access networks (FTTx) has not yet paid off and helped to bolster ARPU.

Compared growth rates for aggregate worldwide telecom services revenues and global GDP, 2009-2019


Source: IDATE, World telecom services markets and players, June 2015

Changes in the distribution of telecom services income by source of revenue, 2009-2019 (billion EUR)


Source: IDATE, World telecom services markets and players, June 2015

Top 15 telecom operators based on turnover in 2014 (billion EUR)


Source: IDATE, World telecom services markets and players, June 2015

Find out more information on World Telecom Market services in our dedicated market report

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

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VOIP and instant messaging


Vincent Bonneau
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


Déploiement du Très Haut Débit par les collectivités territoriales


Pierre-Michel ATTALI
Directeur de la Business unit Territoires Numériques, IDATE

La Métropole de Lyon renforce l’attractivité de son territoire en investissant dans la desserte généralisée en fibre optique des entreprises, des sites publics et para-publics.

La décision de la Métropole de Lyon illustre l’implication des collectivités territoriales sur l’accélération des déploiements fibre sur les territoires. En effet, au travers de ce projet portant sur la mise en œuvre d’un réseau d’initiative publique (RIP), c’est l’attractivité et la compétitivité du territoire métropolitain qui seront renforcées.

La Métropole de Lyon (Grand Lyon), en attribuant à la société Covage, lors de son Conseil communautaire du 21 septembre 2015, sa délégation de service public très haut débit, entend accélérer la couverture fibre de son territoire. L’IDATE, qui a été l’assistant à maîtrise d’ouvrage de la Métropole de Lyon pendant toute la durée de la procédure, a participé à ce projet ambitieux qui permettra de desservir en fibre optique près de 100 zones d’activités, plus de 400 immeubles d’entreprises, plus de 1100 sites publics et para-publics.

Sur la Métropole de Lyon, la dynamisation des offres à très haut débit à destination des professionnels, des entreprises et des acteurs publics est attendue pour permettre notamment des raccordements sur fibre optique plus aisés et rapides, pour des coûts réduits.

> Délibération du conseil du grand Lyon

L’Observatoire des RIP réalisé par l’IDATE au premier trimestre 2015 pour le compte de la CDC et de la Fédération des Industriels des Réseaux d’Initiative Publique (FIRIP) a mis en évidence que la présence des RIP sur les territoires permettait en particulier :

Un foisonnement de l’offre des opérateurs, avec pour plus de la moitié des RIP la présence de plus de 10 opérateurs proposant leurs services pour les entreprises, les acteurs publics et le grand public.

Présence des opérateurs sur les RIP


Source : Observatoire 2015 des RIP réalisé par l’IDATE pour la FIRIP et la CDC


Des économies substantielles sur les coûts télécoms supportés par le grand public, les entreprises et les acteurs publics : dans le secteur professionnel, c’est ainsi près de 60 M€ au niveau national qui sont économisés par les entreprises et les acteurs publics clients des offres à très haut débit fournies par les opérateurs présents sur les RIP.

Gains annuels sur les coûts télécoms pour le grand public, les entreprises et les sites publics grâce à la présence des RIP


Source : Observatoire 2015 des RIP réalisé par l’IDATE pour la FIRIP et la CDC et données Avicca

L'IDATE, renforce une expertise déjà bien reconnue auprès des collectivités et des Pouvoirs publics locaux et nationaux

Les consultants de la business unit Territoires Numériques de l’IDATE interviennent sur l’ensemble des problématiques numériques en offrant une palette de prestations répondant aux attentes de ses clients, dans les domaines des réseaux à très haut débit, des observatoires et de l'évaluation, du développement économique, et des schémas directeurs d'aménagement numérique.

Dans le domaine de l'aménagement numérique des territoires, l'IDATE a notamment réalisé les SDTAN de la Région Alsace, des Conseils Généraux du Gers, de la Lozère, du Val-de-Marne, du Val-d'Oise, de l'Essonne, de la Loire, du Territoire de Belfort et du Syndicat mixte de l'Aire Urbaine Belfort-Montbéliard.

L'IDATE est également conseil dans la stratégie Très haut débit (THD) et assistant à maîtrise d'ouvrage de la Région Alsace, de Rennes Métropole, ou encore de l'Etablissement public Debitex qui porte un projet de 80 000 prises FTTH sur 27 communes de la Seine-Saint-Denis et du Val-d'Oise.


 Plus d'informations sur les expertises et les évènement de Digiworld IDATE :
www.idate.org      www.digiworldsummit.com      www.digiworldweek.com


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Small cells and Wifi offloading


Frédéric Pujol
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 :

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


Digital First


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

For all the latest information, go to: www.digiworldsummit.com and www.digiworldweek.com

Follow us on Twitter: @DigiWorldIDATE


Ultra-fast broadband world market


Valérie Chaillou
Head of Telecom Networks Practice, IDATE DigiWorld

World FTTx revenues will growth from 91 billion EUR in 2014 to reach 175 billion EUR in 2019


IDATE has released the latest issue of its World FTTx database, which is part of its ongoing service covering the ultra-fast broadband market. It provides reference data on this market across the globe, covering more than 70 countries and 150 key players, and providing forecasts up to 2019.

Superfast technologies represented nearly 37% of broadband access subscriptions at end-2014, 8 points more than one year before. (For the definition of superfast platforms, IDATE have considered here three main architectures: FTTH/B,  FTTN and FTTx/D3.0 deployed by cable operators).

FTTH/B is still the leading superfast broadband solution, far ahead of FTTx/D3.0, followed by VDSL:
-    FTTH/B represented 62% of FTTx subscriptions at end-2014. Growth of FTTH/B subscriptions will continue until 2019, but at a lower pace than during 2014, year of real success in China.
-    FTTx/D3.0 represented at December 2014, 27% of FTTx subscriptions. After two years of significant growth, proportion of FTTx/D3.0 on Superfast Broadband is lightly decreasing (29% at end 2013).
-    VDSL, for its part, lagged behind, representing 11% of subscriptions at end-2014; same proportion than at end-2013.

 The regional breakdown is very heterogeneous
‐    Still a geographical predominance of APAC on the FTTH/B market.
‐    FTTH/B is also the main deployed technology in both Middle-East and Africa and Latin America, but it is meeting stronger competition from cable-based technologies in Latin America.
‐    FTTx/D3.0 is still dominant in North America and is generally growing more rapidly than other technologies.
‐    There is considerable space for VDSL in Europe where incumbents still wish to optimize their copper networks.

Compared growth of VDSL                                Breakdown of Ultra-fast broadband
and FTTH/B subscribers,
2014-2019                                      technologies, at end-2014


FTTH Operators ranking: 6 Asian and 4 American telcos make up the world’s Top 10
Only one player among them (AT&T) is involved in large FTTN+VDSL deployment, then there are two cablecos having upgraded their infrastructures to FTTx/D3.0 (Comcast and Virgin Media).
The two Chinese telcos (China Telecom and China Unicom) are leading this ranking with FTTH/B.

Top 10 FTTx worldwide players, at end 2014


Find out more information on World FTTx market in our dedicated market report

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

Future Networks Forum

"Welcome to the Gigabit era?"

These many facets of these topics will be explored at the Future Network Forum on 18 November 2015, as part of the DigiWorld Summit, with:

• Eric DENOYER, CEO, Numericable-SFR
Håkan ANDERSSON, Head of 5G Strategy, Radio Business Unit, Ericsson
Dominique BAROUX, Director, Regulatory Affairs, EMEA, AT&T
Götz Philip BRASCHE, CTO IT R&D Europe, Huawei
Laurent CHATELIN, Investment manager, Marguerite
Anna KRZYZANOWSKA, Head of Unit Broadband, DG CONNECT, European Commission
Jean-Hubert LENOTTE, Director of Strategy, Eutelsat
Blair LEVIN, Executive Director, Gig.U
Alain MALOBERTI, Senior Vice President, Orange Labs Networks, Orange
Terje TJELTA, Senior Research Scientist, Telenor, 5G PPP Association

> Programme for the Future Network Forum Forum



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OTT Regulation


Soîchi Nakajima
Senior Consultant, IDATE

Internet is becoming  not-so-free


Internet Giants are increasingly finding themselves under scrutiny for unfair competition and tax issues – what was once regarded as a free OTT ecosystem is now facing regulatory challenges. Internationally operating players working in various domains and geographical locations are complicating this regulatory challenge, with different cultures and market conditions requiring different approaches.

While this past decade has seen a completely new economy evolve based on the Internet and OTT players (remember, Google’s IPO was only just over 10 years ago), new challenges have also been created by this phenomenon, one of which is regulation. Until recently, new Internet services and business models were being actively encouraged, with the aim of helping to galvanize the economy; however, there is now simply too much revenue involved and more regulatory intervention is becoming inevitable.

Major OTTs diversifying into various service domains


Source : IDATE, The Future Internet in 2025, July 2015

The domains in which regulation on OTTs is currently gathering the most urgent attention are the fields of taxation and fair competition, the regulatory needs being brought about by the sharp rise of leading sharing economy players such as Airbnb (accommodation rental platform) and Uber (car sharing application), where users can offer a spare room (Airbnb) or a car ride (Uber) between end users as opposed to using standard (more expensive) channels such as hotels and taxis. Such players are not required to work under the same rules as those of their traditional counterparts; licenses are not needed, insurances are not taken care of and rigorous safety concerns are not necessarily required. Further, tax issues are often overlooked, with many sharing economy participants not even aware that there is tax involved; they simply do not have the mindset that they are participating in a revenue-generating business, but are simply “earning a few bucks” in a relatively hassle-free manner. This then leads to an unfair playing field, giving the OTTs an unfair advantage over their traditional counterparts.

The regulatory response to these players currently varies from one country to another, or even from state to state in the larger countries.

Citing the unfair competition landscape, Uber has been banned outright in Spain, whereas in Italy the application is allowed and the noise coming from the Italian government appears to be supportive of Uber, considering modifications to their regulation to make it easier for them. These are exceptions to the rule, however, with most governments placing an intermediate ruling whereby Uber is allowed but only for licensed drivers.
Tax collection remains a hot topic, especially for Airbnb where local transient occupancy taxes (“hotel taxes”) are compulsory for all listings yet collection remains difficult. While initially Airbnb stressed that they were not responsible for the collection of the taxes, their stance has softened recently and since the latter part of 2014 they have started to automatically collect and remit the hotel tax in some areas, such as San Francisco and Amsterdam. It is understood that they are continuing negotiations with various other cities also.

It should be noted that while it is these startups that are causing the OTT regulation debate of tomorrow, the large Internet giants and in particular Google are also under scrutiny for unfair competition and tax issues. However these issues have been under investigation for a number of years and are evolving, albeit slowly, with occasional developments from time to time. The same can be said for regulatory debates on the likes of net neutrality, data protection and intellectual property (copyright) issues.

Europe is still debating over which approach to adopt
Such developments in the debates often come from the same countries, with the likes of the US, France, Germany, Spain and the Netherlands often ahead of the rest when proposing and/or enforcing OTT regulation. In addition to what has been mentioned above, net neutrality has continued to make headlines. While Europe is still debating over which approach to adopt, the United States has recently made a bold move by reclassifying broadband as a telecommunications service, thereby paving the way for strict net neutrality regulation. In Europe there are moves by the European Union as a whole, such as the proposed reform of the data protection directive, but some countries stand out more than others. The Netherlands, for example, were the pioneers of net neutrality deployment and the first country to introduce an “Airbnb law”, legalizing the business in exchange for tax payments. Germany has been strict on Uber, at one point banning the service as in Spain, although this motion has been overturned (for now), while both Germany and Spain have ruled that Google are required to pay for information published on Google News. France has strong legal frameworks on many OTT related domains, and is also at the forefront of debates concerning sharing economy players.

 Find out more on Net Neutrality and key stakes for tax optimization, privacy, copyrights and other topical issues surrounding OTT regulation in our dedicated market report


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Cellular Connected Devices


Samuel Ropert
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.

Breakdown of total cellular device (laptop and tablets) connectivity market, by country, in million EUR, in 2015
Source: IDATE in Cellular devices, June 2015

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

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OTT communication services


Soïchi Nakajima
Senior Consultant, IDATE DigiWorld

They have minimal impact on traditional telecom markets


In 2014, the OTT communication services market (the total of OTT revenues generated from VoIP, IP messaging and a share of social networking) will have surpassed 10 billion EUR. Growth is expected to continue and the global market value will reach 23.7 billion EUR by 2018, representing a CAGR of 21.6% from 2014 to 2018. Still, OTT counts for only a very small proportion of market value compared to that of the telcos.

What are the impacts of OTT communication providers on the telcos from a market value perspective? The figure below provides IDATE figures for both telco communication revenues and OTT communication revenues for the period 2012 to 2018. Telco communication revenues are composed of fixed telephony revenues, mobile voice revenues and mobile messaging revenues. OTT communication revenues are composed of VoIP, IP messaging and a part of social networking revenues (as already explained in detail in section 3).

Total telco communication vs OTT communication revenues, 2012-2018 (Billion EUR)


Source: IDATE in OTT Communication Services, December 2014

The reality here is that compared to telco communication revenues, OTT communication revenues remain very marginal. As has already been seen, the OTT communication market value is set for growth with CAGR of 21.6% from 2014 to 2018. Still, looking at the big picture, even in 2018 OTT communication will only account for 3% of the total market.

 Further, IDATE forecasts that the telco communication market will not decline over this period of time, although it will not particularly grow either, with a CAGR of 0.2%. As a result, the total communication services market (telco and OTT combined) is expected to see a CAGR of 0.6% from 2014 to 2018.

 Judging from these figures, IDATE believes that the communication market is not a simple case of “OTTs taking away revenues from telcos”, which is the often-painted picture of the market. Rather, it is a case of the telcos maintaining their current market values, while OTTs are growing their market value by themselves.

 Find out more about VoIP, IP Messaging, Social Networks and the main market players’ strategies in our dedicated market report

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