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Monday, December 8, 2014

Predictions for 2015: operators face churn, the SIM loses its grip, and cloud and VoLTE finally arrive

Mark Windle of OpenCloud writes:

In 2014, operators focussed on rolling out LTE, but some have lost sight of the bigger picture. 2015 will see traditional telecoms services delivered over multiple access technologies, of which LTE is just a part. As next year fast approaches, our predictions take a step back and look at how the industry will adapt to the changing landscape.

Hyper-churn hits Europe

Continued economic pressure on consumers’ wallets will leave many coming to the end of their contract happy with their current phone and with the freedom to hunt for the best deal on a SIM-only contract. Consequently many operators will find their customers leaving in search of a better deal. Without the revenue from new handset hire-purchase sales, operators will depend more on revenues from telephony (voice and video calling) services

In order to differentiate effectively, operators must equip themselves to start innovating in voice and video communication services. Operators that have the ability to continually offer exciting, relevant services to their customers will maintain better margins than those whose only answer is to enter a price war.

The SIM card loses its grip

An increasing number of urban Wi-Fi deployments are offering acceptable mobile coverage to consumers, without the need for cellular operators. Furthermore, a recent report by Analysys Mason has revealed that the 81% of smartphone traffic is carried over fixed-line networks, meaning that most of us will connect to a Wi-Fi network when we can.

Pay as you go consumers and those with small data bundles will increasingly use non-cellular connectivity and communication services, falling back to cellular only as a last resort. Whilst the SIM card will not become obsolete any time soon, it is slowly beginning to lose its hold on the market.

VoLTE arrives – but no one (outside the industry) really cares

Within the industry, VoLTE is big news. However, subscribers are unlikely to notice its introduction: the technology works behind the same familiar dialler. And if they do notice (high-definition audio, or faster set-up) they’re not really going to care: we’ve all got used to incremental improvements, and HD voice has been available on some OTT services for a while. To get a “Wow”, substantial innovation beyond the standard is needed in the service itself.

Same service, different access

In 2015, tradition telecoms operators will accelerate the decoupling of their service and access divisions. In doing this, operators will be able to deliver any communication service over cellular, IP or Wi-Fi, based on a customers’ preference. The separation will allow them to focus on service innovation, similar to competing over-the-top service providers.

Meanwhile, access technology will horizontally integrate: mobile, fixed-line, Wi-Fi all coming together to offer complete and cost-effective connectivity packages. This year we’ve seen BT, EE and Sky announce plans for quad-play offerings, delivering mobile, broadband and television to their customers. This trend will continue next year through partnerships, mergers and acquisitions.

And finally...

We’re pretty sure someone will host a 6G conference before 5G even happens, and we’ll all shrug it off and move on, like this year when Windows decided that 10 was nice round number compared to 9.

Mark Windle is head of marketing at OpenCloud, a UK-based company that provides software products for network operators and MVNOs.
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