Director of Studies - Head of Digital Plan Practice, DigiWorld by IDATE
Mapping the digital world
IDATE presents in Moscow the 12th edition of its DigiWorld Yearbook which provides readers with a concise portrait of the digital world. The Yearbook begins with a look back at the trends that shaped 2011, then goes on to explore the key issues in 2012 and, here, takes a looks at the map of the digital universe.
The presentation by Didier Pouillot, Project leader of the DigiWorld Yearbook edition, takes place during a special session, at "Telecom Networks 2.0: Sharing Engineering International Forum" organized by SVM Media & Events Group (detailed programme http://sharing-forum.com)
Live Presentation of the session on:
Sharing Engineering International Forum
(Starting at 9:30am in Moscow, 4th October 2012)
This event will give us the opportunity to present you the latest edition of our DigiWorld Yearbook 2012, which has become an essential tool for digital professionals, providing a compact and accessible review of the main events of the past year, the latest data on the markets and market players, and the major technological and regulatory trends on the world stage. We will benefit from this occasion not only to focus on the key role of Russia in the telecom and ICT market, but also to show our willingness to position Russia at the heart of our European analysis and research.
Is this the beginning of the end for telcos in Europe?
While the Internet giants clearly have a starring role to play in this newly redrawn landscape, the same cannot necessarily be said of telcos. Emerging economies have been driving the global market for several years now while, in advanced economies, telcos are no longer enjoying the tremendous rates of growth brought by the 20 years of development of mobile telephony. This is forcing them to reinvent their business models to adapt to this relative state of maturity, to increased competition in the marketplace, to the disappearance of the minute as the base unit for billing, to competition from OTT players over their core applications, to financing imperatives created by the surge in traffic…
This reinvention process is only just beginning for telcos. It is going by way of changes in access billing schemes within two-sided ecosystems, offering a) customers tiered pricing based on quality (speed, latency, priority), usage, the connected devices and integrated applications and b) managed network solutions to players further down the chain: CDN, cloud, IaaS and API. Other more radical approaches, or ones born of impatience at the pace of FTTH rollouts, see outsourcing and network pooling schemes as the beginning of the end for the sector as it stands: on the one hand is infrastructure-sharing, enjoying a de facto monopoly, financed by utilities or direct public funding and, on the other, service providers’ models and competition…
But what concerns us here is something else again: the gap between the North American and European markets during this time of difficult transition. The gap can be seen, first, in the way revenue is progressing, especially in the mobile market which grew by 4.5% in 2011 in the United States, while over in Europe (EU-27), telcos’ consolidated revenue dropped by 0.5%. Of course this is due in part to the dire economic situation in Greece (-13.1% for mobile services in 2011), Portugal (- 6.2%), Spain ( 3.2%) and Italy (- 0.8%). But the situation is also bleak in France (- 2.2%) and the UK (- 0.6%). Although not necessarily a contributing factor, also worth mentioning is the four or five-point gap in the capex-to-revenue ratio between the top American telcos and Europe’s incumbent carriers (in domestic spending).
Plus, we cannot help but wonder about a policy that is proving incapable of promoting innovation and investment in the new superfast infrastructure that Europe needs, or competition and price control policies. The third gap results from the sector’s relative fragmentation in Europe, compared to the consolidation we have seen over in the States – even if American authorities’ denial of the AT&T/T-Mobile merger put things temporarily on hold. Meanwhile Europe’s telecommunications’ industry, like Europe as a whole, continues to struggle to create the much sought-after single market.
Responsable Telecom Economics and Business Modelling
> More information about the DigiWorld Yearbook 2012