As every year, IDC published its Top 10 Mobility Predictions. According to the analysts, it’s crucial for mobile operators to adapt their go-to-market strategy to a comprehensive partnering model to drive future growth and remain relevant to customers in 2013.
“Operators used to own the mobile customer’s loyalty, but in recent years the customer has switched his loyalty to either a device manufacturer or to the over-the-top services they use," says Charles Reed Anderson, Head of Telecoms Research, Mobility Lead, IDC Asia/ Pacific, adding that "unfortunately for the operator, today’s consumers care more about the brand of phone they are using than the network they are on. For them, the network is just the tool that let them enjoy the features and functionalities of their phones, and the applications they download through that phones’ application store.”
As a result, operators have not only seen their customer acquisition and retention costs increase, as they seek to differentiate their offering, but have also missed out on the revenues generated in the lucrative mobile services marketplace.
“As it stands, the operators are in a situation where they fund the network, while the device manufacturers and over the top providers (OTTPs) make all the money. It’s similar to someone building a shopping mall, paying for all the operating expenses, and then let all the retailers use the space for free,” says Anderson.
Operators have also not been able to capitalize on the growing Enterprise Mobility Solutions space, as the solutions required by their customers have become increasingly complex and operators in general struggled to develop a mobility practice that can help customers design, develop, deploy and support these solutions.
On the other hand, the good news for operators is that the mobility solutions market is still in its infancy.
Recent network advancements, including the deployment of 4G networks in many Asian countries, provide a solid infrastructure on which operators can build their solutions. In addition, the added complexity in the marketplace - from the continual launch of new device types, operating systems and solution vendors - creates an environment where customers are seeking someone to guide them through the maze of alternatives. IDC believes the mobile operator fills this role best here.
Device manufacturers, application developers, middleware vendors, security players and mobile operators will all be competing to define their role in the mobility solutions ecosystem. To accomplish this, IDC expects to see vendors experimenting in new partnership arrangements, re-defining their go-to-market business models and aggressively targeting adjacent industries and solutions.
In view of these factors, IDC’s top 10 Mobility Predictions for 2013 are:
Prediction 1 - Making of the next big practice – Winning language of mobility
The Asian market currently lacks solution providers that can advise on mobility strategy, bring together multiple vendor products into a single solution, and deliver the systems integration and support that are required to ensure success. To address this massive opportunity, IDC believes that almost every service provider will have a dedicated enterprise mobility practice in the next 12 to 24 months.
Prediction 2 - Inflection point in business tablets
Tablets have reached an inflection point where they have become a business productivity tool for many. Video, business applications and social networking are widely used applications on tablets for various purposes - including research, collaboration or to enable a mobile workforce. The launch of Windows 8 tablets is one factor contributing to this and it has the potential to be the de facto enterprise tablet. In addition, the emergence of 7-inch tablets will spur demand in emerging markets.
Prediction 3 - Business model experimentation
In 2013, IDC believes operators will start to deliver fee-based OTTP solutions, similar to the Telkomsel/Skype offering in Indonesia, that risk further decreasing voice and SMS revenues, but can create an opportunities for operators to gain some traction and revenue in this competitive market space while strengthening their customer acquisition and retention capabilities.
Prediction 4 - Smartphone battle goes high end
In 2013, IDC expects the handset battle to move to the high-end smartphone market, in particular due to the ramp-up of new 4G/LTE phones being delivered to the market. The first high-end phone out of the gate is the Windows 8 phone. BlackBerry will follow suit in January with the launch of the much-anticipated BB10 device. As Samsung and others launch their new devices, the market will become increasingly competitive for the manufacturers, and increasingly attractive for the customers who will be spoilt for choice.
Prediction 5 - Desktop virtualization vendors to enter enterprise mobility
In 2013, key desktop virtualization vendors will introduce, or acquire, solutions aimed at strengthening their enterprise mobility portfolio in areas of device management, security and content delivery. At the same time, it is likely that partnerships between desktop virtualization vendors and Mobile Device Management (MDM) vendors will be forged in 2013. PC desktops will remain relevant in most enterprises in 2013 and onwards, and vendors like Citrix and VMware will be repositioning their solutions to appeal to wider enterprise buying audiences.
Prediction 6 – M2M - Leading the way to the “Internet of Things”
In 2013, M2M will play a larger role for the operators in both their enterprise and consumer customer bases. In the former, IDC expects operators to forge new partnerships with ISVs and systems integrators that will address the challenge of developing, deploying and supporting industry-specific M2M solutions. On the consumer front, operators must get involved in the growing trend of connected devices, including TVs, refrigerators, cameras and automobiles, that becoming readily available.
Prediction 7 - Retirement plan for mobile operators - Investing in adjacencies
As operators seek new revenue streams to counteract the decline in prices for voice and data, they are increasingly creating their own Corporate Venture Capital divisions. IDC believes that operators will seek acquisitions in adjacent industries that share the same target customer market to build their brand and increase customer stickiness through diversified and differentiated offerings.
Prediction 8 - Mobile advertising – The next great growth opportunity for those operators that can capitalize on it
Operators benefit from a wealth of information about the customer, including, most importantly, their current location. Retailers and Over the Top Providers (OTTPs) also capture considerable customer data, but their data is more behavioral based and includes purchase history and browsing trends. The operators must either partner or acquire mobile advertising firms that can leverage both data sets and deliver tailored and relevant marketing message to their consumers.
Prediction 9 - Befriending OTTPs – Friend, not foe, to mobile operators
IDC believes that in 2013, OTT players will want to partner with mobile operators for a variety of reasons, including joint solution creation, go-to-market and platform provisioning. At this point, OTTPs are struggling to replicate the success on mobile devices they enjoyed on the desktop. Similarly, mobile operators are fearful of being reduced to mere "dumb pipe providers" and have been exploring measures whereby they could either capture the market by becoming content providers in their own right or somehow manage the use of their access services by third-party content and service providers of online video, VoIP services via bandwidth throttling.
Prediction 10 - Refarming GSM spectrum – The cost savings initiative that will drive future revenue growth
For operators facing the daunting challenge of funding an LTE deployment, the cheapest and quickest way to deploy is via re-farming of the over-abundant 1800 Mhz GSM spectrum band. However, to manage the network requirements of the increasingly data hungry services, operators also need to leverage Wi-Fi to offload the LTE traffic under a heterogeneous network architecture design for seamless handover between the two networks. This will be the foundation for enabling the next generation of mobile solutions for the operator. (Source: IDC)