Will 2010 be the year when operators fight back against Apple, Blackberry and Google, and put themselves centre stage of the services space? Or will it deliver the final rites to the idea of the operator empire? We asked a cross-section of the industry for its views on what will happen in the industry in 2010. And our survey said…
Key
AC = Andrew Cassini, VP Sales & Marketing EMENA, Andrew Solutions
BN = Bengt Nordstrom, CEO of independent consultancy Northstream
CLa = Chris Larmour, Chief Marketing Officer, Actix
CL = Chris Lennartz, Product Manager at Airwide Solutions
CR = Cato Rasmussen, Head of Solutions Strategy, Martin Dawes Systems
D Ed = Darryl Edwards, CEO, AIRCOM International
DE = Dave Evans, CTO, SurfKitchen
DS = Daphna Steinmetz, Comverse
FS = Faraz Syed, CEO of DeviceAnywhere
IG = Ian Goetz, core network solutions director, AIRCOM International
IL = Ilja Laurs, CEO, GetJar
IS= Ilan Seidner, Marketing Director, RAD Data Communications
JL = Jan Linden, GIPS vice president of engineering
MD = Mat Diss, founder of bemoko
MS = Mike Short, VP & Head of R&D, Telefónica Europe
MW= Mark Watson, CEO, Volantis
RDP= Roberto Di Pietro, VP, Qualcomm CDMA Technologies
What will be the most pressing challenge for operators in 2010?
"The capacity crunch. Stimulating customer penetration of mobile broadband, large bundles for small prices have been the order of the day. However, for the operators, this means a large network investment in HSPA and ultimately LTE with the Evolved Packet Core." (IG).
"2010 is the year when Ethernet backhaul becomes essential. The elephant in the room is synchronisation – without proper timing calls get dropped and hand-overs are fumbled. Beyond this, expect to start hearing about the ‘intelligence crunch'. It is now clear that LTE deployments will require much smarter backhaul networks to support the new RAN architecture, the need for performance and traffic management and the need to make the packet network truly resilient." (IS)
"The most pressing challenge for mobile operators will be upgrading and optimising radio network infrastructure to cope with a large increase in data traffic whilst maintaining a highly accessible and available voice capacity. The parts of that equation that involve radio access include innovative solutions for cell splitting, radio coverage optimisation and the ever-increasing co-existence of macro, micro and in-building traffic. Innovation of this kind at the network infrastructure level will serve to optimise operating costs for the mobile operators as well as reduce visual and environmental impact." (AC)
"There is the belief that LTE/EPC will provide a cheaper network for mobile broadband than HSPA due to its ‘flat' IP architecture. It's true that a key focus of network evolution is to dramatically reduce the cost per bit of delivery, but there are some major issues that need addressing before this can happen. Operators now need to understand the business impact and how to apply the new technology, whilst evolving the legacy network to ensure the lowest cost per bit of delivery for their networks. Innovation is required in the physical architectures and vendor solutions to facilitate profitable mobile broadband." (IG)
"Partnering with the right companies to deliver the next phase of Data wave growth, and navigating through some of the sectoral barriers to adoption (for example eHealth)." (MS)
"Put simply, the biggest challenge operators' face in 2010 is to avoid commoditizing themselves as bit pipes. To avoid this, they must open their network APIs to enable innovative value-added services and also focus on delivering a personalised customer experience that not only encourages data and service usage, but also delivers brand loyalty." (DE)
"Mobile VoIP. The pressure to allow VoIP over 3G and adapt to growing demand for bandwidth intensive content and services." (JL)
"We'll see…LTE roadmaps accelerating faster than anyone currently expects; Self-Optimizing Networks (SON) becoming a reality within months, not years; techniques like SON propagating backwards into legacy 2G & 3G networks.
"We'll see…new ways of measuring customer experience and network quality based on geo-location of actual subscriber events; much more accurate understanding of the quality of experience received by the consumer, but still little being done about it; start to see new measures like accessibility and reliability instead of blocked and dropped calls; a move towards marketing and sales directing network quality improvement efforts as they get access to stats they can understand." (CLa)
"All carriers will still fight hard against becoming a "dumb pipe" although the number of app stores launched will be lower than in 2009 (mainly because of market consolidation here). Various consumer services, from integrated social networks to content distribution will be regularly announced, although the vast majority (90%) of these efforts will fail, so by end of the next year we will see carriers actually controlling mobile content and services much less than today." (IL)
What will we see in the device market?
"Nokia can make two moves. It can either strengthen the brand at the very low end cheap handset market, for developing regions, or secondly, be forced to open up its operating systems much wider and provide better interfaces to cope with flexibility offered by Android, iPhone et al to target the medium & high end phones market." (DS)
"2010 will be the year of Google Android and it will impact almost every handset manufacturer. As a greater proportion of handsets start to run Android, operators will need to carefully evaluate how they differentiate their services on Android to ensure they don't get lost in the inevitable explosion of Android applications and services that will be launched over the next year. Consumers will continue to turn to smart phones for data services in 2010. This trend highlights the importance of operators making data and service usage on mass-market feature phones as accessible and personalised as possible." (DE)
"A focus on applications and the enablement of 3rd party development. The bar will be raised for great applications. As more application developers build on Android it will put pressure on the iPhone to open up their APIs.
"While Nokia, followed by RIM, will continue to dominate the smartphone market, there will be an explosion of new smartphones on the market from smaller/different players. Both Apple and HTC will continue to grow their market share too. Rumors of a Google phone also signal that the balance of power may be tipping away from carriers and toward device manufacturers and app developers." (JL)
"In 2010 the smartphone market will continue to tier, and mid-range devices will proliferate as operators address the demand for devices that offer an app store experience at a lower price.
"The big new arrival in the mobile space will be the smartbook – a new class of device that combines the user experience of a smartphone with the processing power and performance of a notebook in an ultra-lightweight, ultra-portable form factor. The first smartbooks will launch in the first half of 2010." (RDP)
"You'll see the first HTML5 browsers. Why is this significant? HTML5 and CSS3, still developing as standards, will allow developers to, in turn, use mark-up instead of programming. That's a more portable approach, it's more efficient from a data transfer and processing point of view, it allows for more capability within browser-based applications (such as offline data storage) and it allows for more a compelling user experience. All of those things are a big deal on the mobile Internet.
"And, by the way, it means that a web application, run in a browser, will, in many cases, be able to do most of the heavy lifting that right now could only be performed in a native application, such as an iPhone app. That's significant when it comes to getting an iPhone experience on other phones. It's even a big deal on the iPhone, since web applications don't have to go through Apple's approval process." (MW)
App Stores or App Bores?
"Very few carriers could create their own reasonably large, successful app stores. However, even those carriers that do launch their own store next year will eventually switch to platform (like android market) app stores or independent cross-platform app stores. This entire process may take a little more than a year – in fact it's likely to take more like three years. In five years I doubt we will still have more than five carrier app stores of any importance. (IL)
"Operators will try. And like Vodafone, they will fail. In 2010, look for over-the-top service providers from the fixed Internet world to not only continue their struggle with mobile operators for ownership of the subscriber, but up the ante by offering competing voice and messaging apps that rival the operator's own." (BN)
"Vodafone has realised that they have the opportunity for innovation – mobile data and revenue growth by working with innovations in the Internet space, which is exactly what Vodafone 360 is about.
"This goes beyond an app store; an app store is already part of Vodafone 360, but this is the first attempt at unleashing the power of the Long Tail, by enhancing external Web applications and services with operator capabilities, like charging, address books, messaging, browsing, location, profile information and more.
"However, it only works on two handsets which need to be Vodafone 360-customized, so it is still too closed and too controlled. More applications need to be enabled and enhanced – and not just web applications – and they should be enabled and enhanced for any phone." (CL)
"Whilst the industry is being dragged along by social networking brands like Facebook and Twitter, we are not taking time to fully understand the implications of building a service versus building a business.
"In rushing to embrace smartphones, operators are further adopting a culture of over-subsidising the likes of the iPhone in the hope of driving up mobile data revenues when voice revenues are flat or falling. But, this is illusory when the devices are sold with all-you-can-eat data packages, and operators get little or no share of the revenues being made from buying apps and content from independent content store fronts, such as iTunes.
"What I want to see the industry doing is spending more time on thinking through viable revenue models that are fit for purpose.
"The model needs to take account of product cross-subsidy on a per item basis and do so dynamically. Operational processes in billing, charging, provisioning and support need to be thoroughly reviewed and streamlined to give an operator the agility to not just compete with new entrants on the same level, but quickly pre-empt those initiatives." (CR)
"In 2010, operators will focus on delivering and aggregating social networking services as part of a broader push around new and innovative data services. Operators are in the perfect position to deliver application stores, but to be successful they will need to invest in delivering an intuitive, compelling and personalized user experience. If they ignore this opportunity, 2010 could be the year that operators lose the app store race." (DE)
"App Stores will continue to grow, especially as open platforms like Android become more popular. Both RIM and Nokia may make a high profile attempt to obtain more developers on the application side where they both are lagging significantly." (JL)
"Whilst app stores have been the big story of 2009, I suspect this will not be the case in 2010, and any operator looking to invest its money in this way will likely be disappointed. The route to a more effective and universal mobile experience is still through the mobile web. The issue is delivering a compelling experience across every phone – not just the 2% of people globally who have an iPhone. Operators who address this issue will find a healthier return on investment than creating yet another app store." (MD)
"There is third way for operators to cope with this reality: work with the external independent app platforms to better tune them to network and devices. Operators need to empower the external app stores with unique value. Operators can help improve services by delivering it with consideration for dynamic network conditions and tariffs, with superb adjustment to the user's device. Operators can perform excellent profiling of users to assist them in finding apps they would enjoy (according to their social circle and other considerations). Operators can also help in over the air configuration, installation and download and recovery." (DS)
Clouds or shrouds?
Outsourcing of some IT and Network infrastructure already occurs and Cloud Computing (CC) will take this onto a higher level! However, until some clearer CC definitions emerge it is less likely to have a big impact on Mobile in 2010, unless benefits at a wholesale or retail level are made more obvious. Eventually online storage will be more widely shared provided an ecosystem that is usable, trusted and cost effective for customers emerges. (MS)
"The clouds will reign …eventually" (JL)
Statistics and lies:
"Growth rates will be in line with GDP, and fastest growth will be in emerging nations with high GDP growth rates. In Europe growth rates will largely depend on the adoption of the datawave and levels of regulatory impact." (MS)
"Though the focus may be on devices, operators will maintain or increase revenues by the sheer increase of smartphone adoption and the associated data plans." (JL)
"My biggest wish for 2010 is that investment certainty returns for the whole Mobile value chain – clearly economic stability, the role of government and regulators, and actual demand all play a role. But all infrastructure needs longer term planning and resilience , and pragmatic dialogue is the best way to start the new Digital decade. This could be even stronger than the last." (MS)
Which services will drive revenues?
"Operators will not make any significant money on advertising next year. It's worth remembering that Mobile Operators combined global yearly turnover is already in the USD$800 billion range. Google has the bulk of online advertising revenues in the world today, a figure of about USD$30 billion – none of which comes from mobile. We are many years from meaningful mobile advertising revenues and when it happens, Google will have the bulk of it there as well." (BN)
"The uptake of smartphones and the available time-saving applications and features offered on the phones." (JL)
"Operators' revenue growth in 2010 will be directly tied to their ability to drive mobile data and service usage as opportunities for further consolidation or new customer acquisition will be limited.
"To make a meaningful impact on revenues, operators will need to evaluate their data service strategies on both feature and smart phones. In doing so, they need to consider how they will provide a differentiated and personalized service that leverages their unique market position as if they fail, it will be difficult for them to significantly expand revenues in 2010." (DE)
What is the industry not addressing but should be?
"Next year will be about margin retention or improvement. Massive competition is already forcing operators to share networks in order to reduce costs of network operation. Fierce tariff competition compounds the situation. At the moment, there is very little in terms of network centric applications which is exactly why the network operators are frantic to lock in the latest smartphone devices from Apple, RIM Google, Palm and so on. Assured revenue from these data hungry devices will provide the means for operators to maintain their margins." (DE)
"The OS ecosystem is no longer fragmented as much as splintered. This issue of too much choice is unlikely to dissipate any time soon, but I expect OS and application store consolidation to be a clear theme this time next year." (FS)
"What is becoming apparent is that ordering or managing a service is a huge differentiator when it is easy and seamless across all services. However, a single converged view of a diverse range of services is incredibly difficult to achieve. The development of self-care functionality, which allows a customer to manage their account in their own time, offers a solution that can overlay existing systems and be operational much quicker. In fact, as telcos become increasingly "webcos" putting more customer care handling online looks like the best approach." (CR)
"Sponsored communication will definitely be BIG, as people wont be able to pay for all their communication needs. Operators are still hesitant how to go there (but they are all evaluating this topic!)so it will still not happen this year. But soon!" (DS)
"I would say security. The rate at which security threats are emerging is spectacular and protecting mobile PC-like devices is very different from protecting PCs, given the pervasiveness of SMS and the difficulty to install and manage security software on handsets.
"If we don't address this issue before it starts causing real problems, we will be too late for unleashing the revenue potential of services that require security, like mobile banking, marketing and advertising." (CL)
"Net neutrality, Mobile VoIP and mobile video calling." (JL)