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).


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.


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)


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


Nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025

visuel social retouche

A l’occasion de la sortie de la nouvelle édition de son DigiWorld Yearbook, l’IDATE présente son nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025 !

La première session DigiWorld Future  se déroulera le 16 juin au Palais Brongniart, à Paris,  dans le cadre du Festival Futur en Seine en partenariat avec la Ville de Paris et Cap Digital.

A partir des analyses des experts de l’IDATE, les débats seront animés par Marjorie Paillon, Journaliste, Tech 24, Philippe Escande, Rédacteur en Chef, Le Monde et Gilles Babinet, avec les contributions exceptionnelles de :

sebastienbazin lowaxellelemaire lowMaurice Levy lowfrederic mazzella lowjlmissika lowOROUSSAT low














Hybrid TV: Wireline operators’ new video distribution strategies

Jacques Bajon
Jacques Bajon

Head of "Video Distribution" Practice


The market report entitled, “Hybrid TV: challenges and opportunities for telcos and cablecos” published as part of IDATE’s video distribution series, explores the biggest changes that wireline operators are facing today, and the options available to them. It details the three main strategic options that operators will need to choose from: strengthen their video service provision business, charge for OTT traffic or focus on internet connectivity.

Project Manager Jacques Bajon says that, “how telcos’ and cablos’ video strategy evolves is becoming an increasingly important issue, as the growth of OTT video and its impact on internet traffic will change the balance of power for video distribution on wired networks”.

Verizon recently announced its upcoming takeover of Intel’s Media Assets, a division devoted to developing cloud OTT video products and services, as part of the carrier’s bid to step up the rollout of new generation video services for all devices.

While the impact of these changes will vary depending on the region, the state of competition, the influence of the market leaders and the strategies adopted by operators, broad policies and choices are nevertheless becoming clear. Operators will be able to choose their positioning from, increasingly hybrid, strategies.

Strengthening the role of video service provider

Many telcos have joined cable operators in a providing 'traditional TV' services. The underlying reasons are varied and often non-exclusive, and include improved ARPU, triple-play subscriptions and reduced churn. This strategy can be extended, allowing operators to:
• provide new OTT services,
• become a publisher of TV services,
• go beyond their technical network coverage by relying on broadcast partner networks or 'public Internet'.

Charging for OTT video traffi

With the net neutrality debate still hanging over this option, where discrimination is being tolerated only for operators’ OTT services targeting their customer base:
• The first grey area agreements have been made between some service providers generating large volumes of traffic and telcos
• Development of operator or telco CDNs can help with internet traffic optimisation and can also become a traffic quality solution for third-party service providers.

Relying on online connectivity

With this option, operators can rely primarily on internet subscription revenues by assuming the role of neutral distributor of IP services, including video. For telcos, this is a case of returning to their incumbent business, but is a change of role for cable operators.

• More information on Hybrid TV market insight : Challenges and opportunities for telcos and cable operators


Big Data for Telcos

Julien Gaudemer



Consultant at IDATE


How big data can get new revenue
and reduce costs?

Telcos are now in a position to use their data assets to generate value. Through big data techniques, ‘data services’ can generate new revenue or can help telcos to enhance their internal processes and core businesses, as stated previously. Not all data services are efficient for telco businesses, each service having varying efficiency.

Potential benefits of big data applications for telcos in terms of new revenues and potential savings, based on telco revenues and costs in 2012

Big data applications for telcos

Source: IDATE, market report "Big Data for Telcos", publication date Dec. 2013
N.B.: APIs are not included in this table as they are not a real big data application but an enabler for customers.

Internal purpose services

Internal purpose services aim at improving internal operations as well as enhancing customer relationships and products. Most of them use internal data (customer anonymised data or network data) with processing done internally: personal data protection is therefore as important as it is for external purposes and there are no questions of business model or competition. These services are thus easier to roll out and implement than external purpose services (with operations outside the company).

Optimisation of network and real-time DPI

The main benefit of the optimisation of network platforms and real-time DPI is material and financial. Such a service can lead to rationalisation and optimisation of current network infrastructures in the short term, and a more efficient use of the equipment in the long term.
On the financial side, a small reduction in capex by just a few percentage points can be generated immediately thanks to optimisation. It will especially lead to a shift of capex in the long term as investments will be made later. However, a few percent of capex is actually significant for a telco as it can represent several million euros each year. The ROI for optimisation systems can be, however, be significant.

Improvement of products

Big data techniques to improve products are aimed at increasing customer satisfaction (indirectly reducing churn) and attracting new customers. The main consequence of such benefits can be increased turnover due to new customers or a reduced churn rate.
A small increase of ARPU can also be expected in the short term as new products can attract existing customers and generate additional sales. These new products can also provide a competitive advantage to the telco in the short term.

CRM and Sales

The main goal of data services related to CRM and sales improvement is to generate new sales, and especially up-selling and cross-selling. It can increase revenues moderately, in the long term.
In addition, these services can bring a better knowledge of customers and can therefore increase customer satisfaction to a decent degree, reducing churn indirectly and maintaining revenues in the long term. The subscriber acquisition costs (SAC) can also be reduced in the long term as these techniques improve the customer acquisition process.

Churn prevention

In addition to previous data services helping to reduce churn, specific churn prevention techniques using data exist. Churn is, in any case, an important for telcos in a very competitive environment. Churn reduction leads to revenue stability and can avoid massive migration of customers in the case of new attractive plans from competitors.
These new tools can thus lead to a reduction of subscriber retention costs (SRC) in the long term, but with an increase in the short term to implement the churn prevention platform.

Fraud detection

Fraud detection is an important stake for telcos as fraud represents an important cost. Systems to detect fraud are therefore crucial for telcos and are a profitable investment in the long term. Fraud detection can thus lead to sensible reduction of fraud cost and losses.

External purpose services

Services provided by telcos to third parties can generate new revenue from data sold to these parties, or through services based on internal data analysis.
Contrary to internal purpose services, external services have to be analysed in their competitive environment and in their specific market. Each service has multiple ‘external’ constraints, more or less important, depending on the market and the environment.


The market for ‘insight’ services is relatively new, having started at the end of 2012. It is thus small and telcos can have a strong position as they own geolocation data from their mobile subscribers. If only a few telcos currently provide such services, others could join the market in the years ahead. Large OTT players would also be able to provide insights with their own data, but their data seems to be less accurate.
Improvements from new techniques such as real-time analysis (currently available) can bring value to insights but a lot of technical and privacy issues remain. Partnerships with other telcos seem to be not essential as a telco can, for instance, define the number of individuals on an area extrapolating the number of subscribers in this area. However, a partnership with other such players as pure players from the survey market could bring value to such services.
However, the growth potential of this market remains limited as potential customers seem to be limited as well. Such services are not well known at this time, and telcos should communicate more about their benefits, to attract more customers.

Audience measurement

The audience measurement market is not a new one, as some players have been active in the TV audience measurement segment for a long time, followed by Internet website audiences and, to a lesser extent, in mobile application audiences. Telcos have introduced this market to measure mobile audience (for both applications and Websites), as they have a closer presence of mobile devices.
On the mobile segment, OTT players cannot really compete with telcos. The major OTT players on this market are Nielsen and comScore. Thus, to invest in other market segments, and especially those related to the Web, telcos should make partnerships with such players as they both have value to add in a common service.
In the end, the potential growth of this market is significant as the mobile measurement market segment should grow over time, with growing mobile uses.

Raw data sales

This market is still small as few initiatives exist at present. It is mainly composed of partnerships between telcos and other players interested in telco data and especially on very location-specific data.
Such a service is therefore based a discussion between the customer and the telco to define the kind of raw data to provide, and how to exchange it. The process is not automated. An automated system would consist in providing APIs sending the same data for all customers, or insight services with the same result of analysis for all customers.
In terms of competition, telcos are not the only players to provide such data as OTTs can provide it too. However, both face privacy issues as consumers are increasingly afraid of sharing their personal data with third parties.

Ad networks

The advertising market is very large and generates important revenue. Its growth is also very important as advertising is the core of many business models. Competition is very high.
In this environment, telcos can push specific strengths allowing them to get a competitive advantage, namely the data they can use to provide efficient targeted advertising.
However, the share of telcos on the mobile advertising market remains low – IDATE estimates this share at about 8% of the mobile ad market. Partnerships with other telcos or other players would be interesting in order to obtain a larger share of the cake and to reach another target.


The recommendations market is still small and mainly held by such OTT players as Facebook and Google. Their advantage is in providing service through their environment: a social network or even an operating system gathering data on customer habits.
Telcos also have strengths in providing recommendations: location data as well as other declarative data can be used here. This may, though, not be enough to compete with OTT players with their multiple diffusion channels for their recommendations. Recommendations would be thus of limited value for telcos.


The API market is quite specific as it does not generate substantial revenue and is heavily segmented. In addition, APIs cannot be really considered as big data applications. They are mentioned here as an important tool for telcos to share internal data.
The only API currently generating revenue is carrier billing as telcos get a share of the transaction amount. This market is thus very small in value, yet significant in the volume of data exchanged.
In terms of competition, APIs provide specific data that depend on each provider. Carrier-billing APIs are proper to telcos. User profiles are usually provided by social networks, but can be also be provided by telcos, as with Orange. In this specific market segment, telcos compete directly with some large OTT players, but only in terms of the kind of data and not in terms of potential revenue.
Alliances of telcos can bring practical benefits in order to reach a larger share of population worldwide, and in order for developers to develop API connections with only a few players (and not with each telco).

Conclusions on big data services for telcos

Of these big data services, some help to reduce costs whereas others can generate new revenues directly or indirectly. They do not, though, provide the same ‘potential’ benefits in that the final benefits may differ between implementations. The figure below provides an overview of the potential benefits of each service or application in terms of new revenues and savings. These figures are estimations of the potential impact for the global retail telecom market, for a full year. It gives an overview of the benefits of each kind of application.

More information on Big data for Telcos

IDATE delivers its analyses and conclusions on Big Data in its recently published market report "Big Data for Telcos". Our experts spotlighted the different opportunities for telcos and examined the drivers and hurdles of a massive use of Big Data.


Next Gen TV: OTT and on-demand services

Gilles Fontaine


Deputy Managing Director
Director of the Business Unit TV & Digital Content Business Unit, IDATE

The video distribution chain is evolving. Traditional programming models have been turned on their head (shortened release windows; Netflix releasing all episodes of a series all at once); video consumption on tablets is growing, before connected TVs really take off; and linear TV is relying on social networking faced with the growing strength of Internet platforms with a native specialisation in personalised recommendations.

Evolution in action

The various categories of player are seeing their historical models under threat. Cable and IPTV network operators have had to review their content distribution strategies. Some (Comcast) are strengthening their offerings to compete with OTT services, while others (Telecom Italia) are offering as a minimum a combination of linear television and on-demand services without quality of services guarantees. Television channels, whose core business is aggregation, want to keep their added value in a climate of growing on-demand. On the one hand, the major free channels are looking to promote live events to maintain the link with their mass audience; on the other hand, pay-TV services are introducing VOD to increase their attractiveness and are also investing in exclusive rights.

VOD service revenue worldwide

Fragmentation before convergence?

The growing number of offerings and players coming onto the video market is leading to fragmentation. New players, from the Web and also consumer electronics manufacturers, are coming out with new free or paid services that fi ll market segments ripe for exploitation, such as subscription-based VOD services, which compete with pay-TV, and ad-supported premium programming, which competes with the catch-up TV services of free channels.
The lines between linear services and on-demand services are likely to blur with the advent of mixed services that combine linear (or relinearised) television and directly competing on-demand programming. Fragmentation is also occurring due to the proliferation of proprietary ecosystems that are breaking away from the traditional ‘standardisation’ of television distribution and reception. In an effort to both promote their proprietary devices and to exploit customer loyalty, TV manufacturers and developers of mobile phone, tablet and connected TV operating systems are seeking to create their own ecosystems.
However, this fragmentation should be reversed in the medium term as a few distribution platforms start to dominate, offering the major content services and differentiating themselves by the quality of experience delivered to their customers. We should see the situation return to something like the traditional television model, where the various distributors are generally offering the same services, but packaged differently.

We can therefore identify three opposing visions for the long-term evolution of video content distribution:

  • The traditional model of packaging access and content together: Using an intelligent network equipped with a smart box, telcos and cablecos distribute packages that they have negotiated with content service providers or directly with the producers.
  • The self-supply model: Strong-brand content services use the open Internet to reinforce or re-establish a direct link with consumers.
  • The digital store model: E-commerce sites offer all content and make it available to consumers through recommendation and personalisation engines.

Long-term growth outlook for on demand television services

What impact will we see on the market?

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

TV: the top on-demand service market in 2022

About the Digiworld Yearbook

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

digiworld yearbook 2013
197 pages that deliver the finest market insights from IDATE experts who track the changes at work in the globe’s telecom, Internet and media industries throughout the year.

the DigiWorld Yearbook is published in English and French and available in print and PDF format. An iPad edition, developed by Forecomm, is also available.

The 2012 edition can be downloaded for free
The 2013 edition is available for purchase. Print: €99.99, incl. VAT; PDF and iPad: €54.99, incl. VAT


  • You can have a look at the digiworld yearbook 2013, purchase it or even download the 2012 version for free at : www.digiworld.org/yearbook/

Mobile and Online Payment

Julien GaudemerJulien GAUDEMER

Consultant at IDATE

Opportunities for telcos:
NFC & carrier billing

OTT players and telcos have been involved in the payment market for several years already, having designed their own payment systems.

On the one hand, most OTT players have an internal payment system allowing users to pay for virtual or physical goods directly on their platform. Telcos, on the other hand, have developed carrier-billing services that allow users to pay through their phone bill. This market segment is still growing and generates a significant volume of transactions. IDATE estimates the worldwide carrier- billing market to be 15 billion EUR in 2012 and expects it to reach 22 billion EUR in 2017. The internal payment systems of the large OTT players – Google, Apple and Facebook – generated about 10.5 billion EUR of virtual goods sales worldwide in 2012 (for these three players). Amazon generated 45 billion EUR of worldwide virtual and physical goods sales in 2012. These figures include payment card transactions, carrier-billing transactions and their payment system transactions. In addition, the PayPal payment system generated 73 billion EUR of transactions worldwide in 2012.

Overall e-commerce market estimated by IDATE at 789 billion EUR in 2012

Such figures, however, have to be taken in comparison with the overall e-commerce market, estimated by IDATE at 789 billion EUR in 2012. Furthermore, carrier billing remains a limited payment system as users can only pay small amounts of money and mainly for virtual goods. Hence, some telcos are trying to extend their payment activity to remote online payment systems, of the likes of PayPal; one such is Deutsche Telekom with its ClickandBuy system. In addition, telcos and the large OTT players are seeking to have in-store payment, in addition to online payment.

Positioning of telcos on the main payment services

NFC services, Carrier Billing, Mobile payment and bank account

Source: IDATE

The in-store payment market is still led by ‘plastic’ payment cards and cash payments, but some new payment systems are progressively being introduced at the point-of sale: NFC mobile payment, barcode or QR code mobile payment or payment with a mobile bank account, the latter in developing countries. Non-NFC payment systems are generally used by specific retailers, such as Starbucks, for internal use, except for PayPal introducing its payment system in-store through various non-NFC techniques. The NFC mobile payment system is still in its early stages; the number of users was estimated by IDATE to be 5 million worldwide in 2012, generating 1 billion EUR of transactions and likely to reach 141 million users in 2017 with 51 billion EUR of transactions.

5 million NFC mobile payment system users worldwide generating 1 billion EUR of transactions – in 2017 these figures will represent respectively 141 million user with 51 billion EUR of transactions

These figures should be compared with the number of payment cardholders – more than
4 billion. NFC-enabled phones are increasingly available among the smartphones currently for sale, allowing 248 million users to be equipped with an NFC phone in 2013, worldwide, according to IDATE research. As for NFC mobile payment services, OTT players and telcos are currently involved in a fierce battle. On the one hand, the OTT players are providing services on their own, or with a limited number of partners, avoiding banks and telcos (and thus obviating intermediate costs. Telcos, on the other hand, are setting up partnerships with banks and other telcos to provide a unique telco mobile payment application. The business model of NFC-payment application is mainly advantageous to banks and payment systems (as with Visa or MasterCard); it is not a gold mine for telcos, with their fees from SIM rental, or OTT players. In fact, telcos and OTT players may generate more revenue from services associated with the payment process than with payment itself.

Loyalty programmes – couponing sytems – transportation: such services on a 'mobile wallet' may generate extra revenues for telcos or OTT players

The services related to payment are usually loyalty programmes, couponing systems or transportation. The integration by telcos or OTT players of such services on a ‘mobile wallet’ may generate revenue from, for instance, retailers or consumer brands. Some telcos even launched these related services before launching their payment solution. This was the case with the UK telco O2; it launched a multi-brand loyalty programme that now already attracts five million users. Google provides its NFC mobile payment application Google Wallet along with the coupon application Google Offers or the pushed suggestion application Google Shopper. The adoption of NFC technology on mobile devices by consumers will thus probably be facilitated more by the development of these related applications than by the payment application alone. However, related applications require partnerships between telcos or OTT players and retailers, and the design of user-friendly applications that may integrate multi-brand couponing system or loyalty programmes.

This is an excerpt of our insight "Mobile and Online Payment" being a part of our ongoing monitoring service Telco vs OTT watch


Telcos vs OTT: Cloud Markets

Julien GaudemerJulien GAUDEMER

Consultant at IDATE

Opportunities for telcos: Personal Cloud, IaaS, PaaS and SaaS

The cloud computing market is currently growing at a significant rate, on both the consumer and business sides.

The Software-as-a-Service (SaaS) segment, which provides software services online through a Web interface, is the most important cloud segment. Infrastructure-as-a-Service (IaaS), which provides on-demand calculation and storage capacities online, is the second market segment after SaaS, but it should reach the SaaS level in 2016, with IaaS and SaaS each representing just short of one-half of the market. Platform-as-a-Service (PaaS), where on-demand servers are dedicated to application trials and rollouts, represents a marginal share of the overall cloud computing market, but is usually bundled with SaaS or IaaS, in order to attract developers and generate more revenue on SaaS or IaaS.

Globally speaking, it is the large OTT players that are leading on the cloud
computing markets, while telcos do have a role to play.

Dropbox, Apple and Google are the leading personal cloud providers, whereas Salesforce.com, Google and Microsoft lead on the SaaS market. Amazon is one of the most-used PaaS and IaaS providers. Telcos, in contrast, only entered the cloud computing market a few years ago and later
than the OTT players, and have remained marginal - but they do have several parts to play. In fact, they may especially have a competitive advantage at the local level, where they can benefit from a local commercial presence, contrary to many OTT players.
Moreover, most telcos have now rolled out data centres in a majority of countries, with major investments. Thanks to their network, they can claim to have an end-to-end approach to guarantee the continuity and Quality of Service. This aspect is not a key issue for most customers who may be more interested in the data protection ensured by a local provider. As such, telcos have the infrastructure required to provide IaaS products, or can be helped by third parties, whether companies that they have acquired, as with Verizon and Terremark, or a partnership with a IaaS pure player, as Telefónica has established with Joyent. Besides, telcos also provide communication-based SaaS that most OTT
players cannot at this scale, with elements such as unified fixed-mobile communication or video conferencing. On the personal cloud market segment, most telcos currently provide storage service bundled with mobile or fixed rate plans, as a way to limit churn and generate indirect revenues.

Positioning of some telcos on cloud services

Telco cloud services (IaaS, PaaS, SaaS, Personal) positioning (Absent, Minimalist, Opportunistic, Determined)

Source: IDATE

To consolidate their position on the cloud computing market, telcos should develop partnerships with a diversity of cloud players.

Such partnerships could position telcos as intermediaries for providing cloud services, in a variety of ways. Firstly, telcos can get help from white label providers in order to provide cloud services with a faster time-to market. Rackspace, for instance, provides a white label telco cloud that consists of a preconfigured cloud base for quick rollouts of various cloud services. Second, telcos can be involved in the cloud computing market as a 'cloud broker’. In the SaaS segment, telcos are not usually product leaders: providing a SaaS marketplace could enable telecom operators to become key players by aggregating various products from multiple providers. Such a concept is particularly interesting as telcos can target a large range of customers that OTT players cannot necessarily reach. A word of caution: marketplaces are not only provided by telcos. OTT players, despite pushing their own services, also provide marketplaces, in particular PaaS leaders such as Microsoft or Salesforce. Furthermore, a partnership with infrastructure providers may help telcos to provide a strong IaaS offering, much like Verizon and Terremark or Telefónica with Joyent. In the personal cloud segment,
partnerships with OTT pure players can also be considered: SFR bundles free extra Dropbox storage in some of its mobile rate plans, as does NTT DOCOMO with Evernote.

This is an excerpt of our insight Cloud Markets" being a part of our ongoing monitoring service Telco vs OTT watch


World Telecom Services

Project Leader, Digiworld by IDATE

Global telecom services market to reach over €1,200 billion in 2015

“We have observed that, overall, telecom services are recovering more slowly than the economy as a whole,” reports Carole Manero, head of IDATE’s Telecom Players & Markets report.

Montpellier, 7 May 2013 - IDATE reveals the findings of its world telecom services watch. After a setback in 2009 and very slight growth in 2010, the global market has been inching back to a more solid recovery since 2011, growing by a modest 2.7% in 2012. This translates into telecom services revenue of €1,115 billion for the year.

Now in a recovery phase, telecom markets in advanced countries are proving somewhat resilient, whereas in fast developing markets the increase in volume is so steady that the ripple effect far outweighs any structural obstacles. 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.

World telecom services market - 2012

World telecom services market revenue by type and region

Source : Digiworld by IDATE

Majority mobile access

According to IDATE, the number of mobile customers worldwide should top the 8 billion mark in 2017 (+28.0% in 5 years).

• The number of Internet subscribers will grow more strongly (+37.3 % between 2012 and 2017, +6.5% per year on average), reaching 1 billion by the end of 2017.

• Traditional landlines continue to loose ground in the face of VoIP and mobile.

The spread of broadband

According to IDATE, the number of fixed broadband subscribers is expected to reach 957 million worldwide by 2017, for a penetration rate of 14% of the population. The number of 4G mobile subscribers should experience strong growth.

Two 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.

Revenues from telecom services

According to IDATE, the global revenues from telecom services will grow from 1,115 billion in 2012 to 1,286 billion in 2017, representing an average annual growth of 2.9% in 5 years.

• Revenues from mobile services will grow by 18.7% between 2012 and 2017 (+3.5 % per year on average), reaching 779 billion EUR in 2017.

• Revenues associated with data transmission and Internet will grow more strongly (+32.8% between 2012 and 2017, i.e. +5.8% per year on average), to reach 329 billion EUR in 2017

• The turnover of fixed telephony will continue to decline significantly (-15.9% between 2012 and 2017, i.e. a decline of 3.4% per year on average), to be at 177 billion EUR in 2017.

Scalability of operators in emerging countries, even if the global top three remains unchanged since 2007

A single change in the ranking of European operators: Telefonica overtook Deutsche Telekom in 2011: now the leading European operator, the Spanish group ranks fourth in the world.

Chinese operators regularly win places in the world rankings

Vimpelcom gained fifteen places in 2011 : Owing to the acquisition of a large part of the shares of Orascom Telecom and Wind, VimpelCom moved from 34th place in 2010 to 19th in the world in 2011

Several operators from industrial countries "drop out": The Dutch KPN and Canadian ECB fell back by five places in two and a half years and drop out of the top 20

Classement des principaux opérateurs télécoms

Selon leur chiffre d'affaires au 1er semestre 2012 (milliards EUR)
World telecom operators ranking according to revenues end 2012

Source : Digiworld by IDATE

Five operators in the top twenty worldwide for over 50% of their turnover outside their domestic market:

• Among them, three European operators...

- Vodafone: global operator widely present in Europe, Asia and Africa

- Telefónica: with a widespread presence in Latin America and in some European countries (UK, Germany, Czech Republic, Slovakia)

- Deutsche Telekom: present in Central and Eastern Europe and in several Asian countries

•...and two operators from developing countries:

- America Móvil: present mainly in Latin America (plus participation in Europe acquired in 2012)

- Vimpelcom: already present in Central Asia, with a new presence in Africa and Europe (Italy) thanks to the deal with the Naguib Sawiris group

Chef de projet, IDATE

More information about World Telecom Services


Telecommunications versus Over-The-top communications

Soichi Nakajima

Senior Consultant at IDATE

OTT communication service
will account for 6% of total
communication service revenues by 2020

In 2020, for the USA and EU5 combined, OTT communication service revenues will have increased to 15 billion EUR from 7 billion EUR in 2012. Yet they will still only account for 6% of total communication service revenues, with telcos accounting for the remaining 94%. The total market will decline, mainly due to the telcos’ devaluation of the market, rather than the OTTs taking their revenues.

Drawing on IDATE’s extensive work on the latest trends in communication services, this latest study, “Future of Communication 2020: Telco & OTT communication - market forecasts” delves deeper into our analysis and forecasts the paths which the market is expected to take between now and 2020.

The six key trends shaping the market
In this study, IDATE outlines the 6 key trends happening in the communication services market which will shape the market through to 2020.

1. The aggregation of communication types: IDATE notes that most communication service providers are aggregating and providing several communication types to the market. For example, Facebook is primarily a social network (which is a communication tool in itself), but also offers voice, messaging and file sharing services too. In the case of operators, they of course traditionally offer voice and messaging as their core product, but are now looking to diversify into file sharing too, either through cloud products or the GSMA-led RCSe (Rich Communication Suite enhanced) initiative, marketed as ‘joyn’.
* EU5: France, Germany, Italy, Spain, United-Kingdom

2. Beyond traditional communication for telcos: The telcos are now looking to offer more than simply voice and messaging, in order to remain competitive in the market and to remain more than a dumb pipe. IDATE sees three main ways in which telcos are striving to achieve this: providing their own OTT communication service (such as Telefonica with their TU Me app and Orange with their Libon app); partnering with OTT communication service providers (such as Verizon and H3G UK with Skype and H3G HK with WhatsApp); and joining the GSMA-led ‘joyn’ initiative, launched by the three principle operators in Spain (Orange, Telefonica and Vodafone), which aims to offer enhanced communication services across all mobile phones in the same simple way as traditional voice and SMS today.

3. Voice and messaging becoming a telco commodity: The need for telcos to offer more than the traditional voice and messaging service is largely due to the commoditisation of such services. These services are today taken for granted, and virtually all telcos offer them in abundance; that is to say for a certain fee, users get massive amounts of minutes and messages that in reality are hard to use all up, and there are also many cases of unlimited offerings. This means that the value of such services is decreasing. Another trend for telcos is bundling, from double to quadruple play. Whilst such marketing strategies are intended to increase user appeal and also reduce churn, the fee itself is normally reduced and hence further devalues the standard voice and messaging services.

4. Mobile data and WiFi makes strong case for OTTs: For OTT communication services to work on mobile, there needs to be Internet connectivity on the mobile. Especially with the exploding popularity of smartphones, this Internet connection is increasingly provided by both mobile data plans and WiFi. Unlike voice and messaging, unlimited mobile data packages are relatively rare with at the very least throttling usually involved. Especially in the case of messaging there are only small amounts of data involved and thus this poses no problem. Video communication, on the other hand, is often banned by operators, but is possible through WiFi; and in many situations where one wants to use video communication, the user is stationary anyway (such as calling loved ones far away).

5. The rise of video communication: IDATE also notes the increased interest in the market for video communication. The concept is hardly new since operators have in the past tried to market the service, but with limited success. In particular, one of the demerits of operator video-calling propositions was the high cost for users, but now OTTs have come in with a free proposition using WiFi, including the likes of Apple and Facebook. Further, the concept of WebRTC, which allows video calling directly from the browser to any other browser could potentially boost video calling; there is no need for users to download software as WebRTC is an API for developers.

6. Genuinely free OTT offers in exchange of user data: One of the obvious advantages of OTT services is that it often comes for free, or in some cases, a very low fee. As an overall trend in the Internet market, the advertising model is becoming standard and the advertising market is set to grow with better tools and analytics, especially for mobile. The communication market is no exception, and is set to profit from advertising. However, generally speaking, users see advertising as a nuisance, and there is also a market for low-cost services with no advertisements, as demonstrated by the highly successful WhatsApp application.

Project Manager: Soichi Nakajima

Soichi joined IDATE as a senior consultant in January 2009. His main area of endeavour is the mobile communications market, such as the mobile Internet, applications, contents and services, the analysis of strategies employed by the various players, scenario building and forecasts. He also works on other business potentials for the mobile Internet, such as smart grids and VoIP. Before coming to IDATE, Soichi worked for NTT DoCoMo, Japan’s largest mobile network operator by subscriber numbers, where he played a leading role in the strategic planning of the roll-out of Japan’s first 3G M2M data-only tariffs. Soichi holds a Bachelors degree in mathematics, from the University of Nottingham in the UK.

To learn about more about this topic and our related market report please visit our website


Hybrid TV Prospects : Impacts of Connected TV

Jacques BAJON

Head of Distribution Video Practice at DigiWorld IDATE


Montpellier, 24 January 2012 – IDATE provides readers of its recently published market report “Hybrid TV Prospects, Impacts of Connected TV”. This study aims to position the hybrid solutions in this new context and to measure their impact on the "big" TV markets.

“Hybrid TV is now a reality. The appealing for OTT video content, amplified by the development of connected TV solutions, is further spurring this trend”, says Jacques Bajon, Head of Distribution Video Practice at DigiWorld Institute. “These developments are attracting the attention of the big Internet companies who will throw themselves into the trend and surely have an impact on the key segments in the video distribution chain.”

IDATE estimates the market for OTT video services on the TV at EUR 3.4 billion in 2015

The market for video services on connected TVs is still only taking shape, as we see the first hints of how players are positioning themselves and how they are structuring their service offerings. Though virtually non-existent in 2010, this market is set to explode. IDATE estimates the market for OTT video services on the TV will be EUR 3.4 billion in 2015, with the following geographic breakdown:

- United States: 40%

- Europe: 24%

- Rest of the world: 36%

Trends in hybrid’s development and positioning of hybrid solutions

Hybrid solutions seem to be positioned in one of four ways:

  1. Two-way broadcast: The DTT/broadband or satellite/broadband hybrid network is becoming the leading network for distributing packaged on-demand and linear offerings.
  2. Cable and IPTV extension: DTT/broadband or satellite/broadband hybrid solutions provide additional coverage to the TV offerings of managed network operators.
  3. Competition with cable and IPTV: The DTT/broadband or satellite/broadband hybrid network offers an alternative to cable and IPTV services.
  4. Optimization of wired networks: Hybrid solutions help alleviate congestion on wired networks, which prioritize Internet access quality over the distribution of managed video services. The potential of hybrid TV distribution varies by market:
  • · In the US, the trade-offs made by cable and IPTV operators will determine the direction the hybrid market takes. Satellite may still capitalize on this solution to counter these operators’ triple play offerings.
  • · In Germany, the hybrid TV landscape will primarily depend on how quickly cable migrates to digital and IP. If the current trend plays out, these operators will play a central role along the same lines as their American counterparts. If not, FTA satellite operators will have the trump card.
  • · In France, where IPTV penetration is extremely high, hybrid could take multiple forms, depending on operators’ strategies. The situation could go one of two ways—cooperation between wired and broadcast operators to provide additional coverage or close competition between networks where the full IP migration of the wired operators would go up against hybrid’s vague efforts in the FTA DTT TV segment.
  • · The UK is the most advanced hybrid market today thanks to the broadcast/OTT combination. This trend will continue, and FTA TV operators will reap the rewards.
  • · In Spain, DTT will play a central role. The DTT + OTT combination will dominate, with additional opportunities for wired operators to expand their coverage using the terrestrial network.
  • · Italy is the country with the most potential for gain from hybridization. The "absence" of two-way TV networks clears the way for partnerships between OTT and broadcast (DTT and satellite) to dominate. 
OTT & Hybrid distribution chain: war-time?

More informations on http://www.Idate.org



Jacques Bajon

Head of Distribution Video Practice at DigiWorld IDATE.

PR- Emmanuelle Renauld

Presse & Technologies

erenauld@pressetech.fr - Tel +33 (0) 156 566 464