Research firm Strand Consult’s 2013 trends for the mobile telecommunications sector reveal a mix of opportunities and challenges: consumers will benefit from lower prices and increased competition, governments may finally deliver meaningful broadband targets, and telecom investors could face a difficult year.
Strand also forecasts a major year for Facebook as it deepens its mobile strategy; predicts continuing conflict between operators and over-the-top (OTT) players; and expects the patent litigation landscape to become more complex and sophisticated.
Labeling 2013 “exciting, if not challenging,” Strand outlines fifteen predictions across the telecom landscape. Key highlights include:
- Consumers stand to gain from intensified competition and falling prices: Strand highlights Scandinavia as a model, where high competition has driven down prices, encouraged flexible business models and delivered very fast broadband.
- Smartphone subsidies will decline or disappear in many markets: As handset costs rise and operators reassess margins, subsidies are likely to be scaled back. Strand suggests handset manufacturers will bear much of the responsibility for shifting this dynamic.
- 2013 could be a rude awakening for telecom investors: Strand warns that investors may face “tough” choices in boardrooms. To reduce costs, consolidation is likely—either shared infrastructure projects among several operators or mergers that combine two operators into one.
- Government broadband targets may gain real traction: This year could mark a turning point for national broadband initiatives. Strand raises the provocative question of whether governments are prepared to reallocate funds from areas such as health or education to accelerate fiber and broadband deployment.
- MVNOs could play a much bigger role in the US market: With a similar number of network operators to Denmark but far worse performance on service, speed and price, the United States has room to improve. Strand suggests the FCC could promote a mobile virtual network operator (MVNO) strategy to stimulate competition and innovation.
- Facebook will push harder to monetize mobile products and services: After a strong mobile push in 2012, Strand expects Facebook to intensify efforts in 2013 to generate mobile revenue beyond traditional advertising approaches.
- The value-added services (VAS) market may appear stagnant: Strand predicts the VAS sector will look subdued in 2013. By contrast, NFC and mobile payment initiatives will continue to expand, though progress will be uneven because these solutions do not gain uniform acceptance across all markets.
- OTT players will continue to challenge cable and traditional operators: Following what Strand calls the year OTT “exploded” onto the telecom scene, operators will remain under pressure from bandwidth-hungry services such as Netflix and other streaming platforms.
Strand’s full set of fifteen predictions spans the entire telecoms ecosystem, offering numerous points for discussion and further analysis.
The OTT ecosystem is a complex topic. For example, research from Amdocs has shown many service providers view OTT players more as potential partners than outright threats, which complicates the simple narrative of confrontation.
Industry observers have also noted the potential for a wave of new MVNOs. Coverage of an MVNO conference in Paris suggested significant market opportunity, leading to questions about whether the US should pursue similar strategies to boost competition.
At the same time, the prospects for NFC and mobile payments remain uneven. Some analysts point to obstacles—for instance, device support can limit adoption—so Strand’s relatively optimistic view on NFC’s potential should be weighed against those market realities.
Which of Strand Consult’s predictions do you find most persuasive, and which do you think are likely to miss the mark by 2014?