Post on 04-Apr-2018
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
THAILAND TELECOMS SUMMIT 2016:
BUILDING BLOCKS FOR SUCCESSFUL OPERATOR
STRATEGIES
FIXED–MOBILE CONVERGENCE: A
RETAIL PERSPECTIVE
STEPHEN WILSON
OCTOBER 2016
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Different convergence-related strategies have been adopted
across all regions
2
Selected fixed–mobile convergence transactions by region
Region Action Date
Central and Eastern Europe
(CEE)
Telemach buys Tušmobil
Rostelecom and Tele2 Russia
2015
2014
Developed Asia–Pacific (DVAP) KDDI Corporation buys J:COM 2014
Emerging Asia–Pacific (EMAP) Telekom Malaysia buys P1 (Packet One
Networks)
Vodafone buys YOU Broadband
2014
2016
Latin America (LATAM) Digicel builds FTTH 2015
North America (NA) Shaw Communications buys Wind Mobile 2016
Western Europe (WE) BT buys EE
Telenet buys BASE
Vodafone buys Kabel Deutschland
Vodafone-ESB FTTH build in Ireland
ZON and Optimus (NOS)
Vodafone and Ziggo
2015
2015
2013
2014
2013
2016
Fixed player
buys mobile
business
Mobile player
buys or builds
fixed network
Merger or
joint venture
Key
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
An increasing number of CSPs believe that their future growth
will be stronger if they provide both fixed and mobile services
3
Year-on-year change in mobile service revenue by
region, 2012–2015
Peak mobile revenue
In Europe, there was a sense that
mobile revenue had peaked under
existing business models.
Competition
• CSPs’ need to compete with
integrated players with high fixed–
mobile bundle take-up has led to
fixed–mobile consolidation.
Traffic trends
• Increasing fixed-line traffic has
secured the case for fixed
broadband versus cellular.
Drivers of fixed–mobile convergence
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Fixed service revenue has the potential to grow significantly
over the next few years in emerging Asia–Pacific
Total fixed service revenue and fixed broadband retail revenue, emerging Asia–Pacific, 2015–2020
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Network-related drivers will act as a further spur towards
convergence
5
Cost and lifespan of operator’s asset layers
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Operators have various options for aggregating LTE and Wi-Fi
and boosting Wi-Fi hotspot peak speeds and capacity
6
Operators can boost the appeal of Wi-
Fi hotspots by providing higher speeds
and capacity through LTE/Wi-Fi
aggregation.
LWA has been standardised in 3GPP
release 13 and Korean mobile network
operators (MNOs) have used MP-TCP
based systems.
Korea Telecom brands its LTE/Wi-Fi
aggregation service as GiGA LTE.
GiGA LTE is only free to those
subscribing to more expensive LTE
packages with larger data quotas.
Customers must physically activate the
service on their device. An icon on the
phone then shows that the service is
active.
Korea Telecom GiGA LTE maximum theoretical
download speeds by technology
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Korean LTE/Wi-Fi aggregation rollouts have coincided with
an improvement in public Wi-Fi data traffic growth rates
7
The downward trend in Korean public
Wi-Fi data traffic growth reversed in 2Q
2015. This coincided with the launch
of LTE/Wi-Fi aggregation by all three
Korean MNOs in June 2015.
The growth rate also increased
significantly year-on-year in May 2015,
before these services were officially
launched.
Initial interest in LTE/Wi-Fi aggregation
appears to have been strong in Korea.
600 000 subscribers were using KT’s
GiGA LTE service by October 2015,
which is equivalent to 5% of the
operator’s total LTE subscriber base.
Korean public Wi-Fi data traffic year-on-year growth
rates, 1Q 2014–2Q 2016
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Hybrid LTE and fixed-line access could help differentiate
converged operators
Hybrid LTE and fixed-line access can
differentiate converged operators.
Hybrid LTE and fixed-line packages can
be differentiated from standalone LTE
tariffs, because they can offer
genuinely unlimited data allowances.
Deutsche Telekom launched its hybrid
DSL–LTE packages in Germany in
March 2015 and take-up is growing.
Prices are the same as for non-hybrid
packages, but Deutsche Telekom
charges a monthly rental of EUR9.95
for the hybrid device.
Deutsche Telekom’s hybrid DSL–LTE subscribers,
Germany, 2Q 2015–2Q 2016
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Standalone fixed wireless access can compete with low
speed wireline and can serve as a precursor to fibre rollout
Globe Telecom in the Philippines is an
example of a successful fixed wireless
player in EMAP. It enjoys advantages
that other EMAP MNOs may not
possess.
Globe Telecom has grown its fixed
wireless base without significantly
undercutting incumbent PLDT’s prices.
Using LTE for home broadband in areas
with fixed competition will be more
difficult with strong growth in fixed-line
data traffic.
Deploying cellular routers that are also
optical network terminals (ONTs) can
remove the need to deploy two boxes
and can decrease costs.
Globe Telecom and PLDT Philippines, fixed wireless
subscribers and wireline subscriber net additions, 1Q
2015–1Q 2016
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
A very high percentage of fixed broadband subscriptions are
attached to converged bundles in some markets
10
Proximus’ annualised churn by number of services,
2Q 2016
Fixed–mobile bundle subscribers as a percentage of
total fixed broadband subscribers, end 2015
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Operators have successfully attached additional SIMs to
converged bundles
11
Impact on the mobile market of fixed–mobile convergence offers
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
KPN in the Netherlands emphasises the benefits of bundling
services beyond discounts in order to encourage convergence
12
KPN Compleet’s benefit structure, 2015
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Operators have added a wide range of services to converged
bundles
13
Features (beyond core services) that are added to converged bundles
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Operators may raise prices and will aim to boost mobile data
consumption in order to increase ARPU for converged bundles
14
ARPU and quarterly churn for Movistar Fusion bundles,
1Q 2014–4Q 2015
Boost mobile data consumption
This strategy can be supported by
offering pay TV in converged
bundles, and by including a multi-
screen component in the service.
Increase prices
Evidence from Movistar suggests
that raising prices can be
successful.
Implementing price rises alongside
an improvement in service features
appears to be a sensible strategy.
Ways to grow converged bundle ARPU Strategies for increasing
converged bundle ARPU
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
Key takeaways
15
1Fixed–mobile convergence has been driven by a number of factors.
These include evidence that mobile revenue in many markets has
peaked, as well as network-related trends favouring ownership of
both fixed and mobile assets.
2Fixed and mobile networks could be used together to suit customers’ needs.
Fixed wireless offers could be used to build up a customer base
before making investments in FTTH. Hybrid fixed and mobile access
could be a differentiator compared to standalone fixed broadband.
3Fixed–mobile bundles could be used to drive postpaid mobile penetration.
Selling postpaid mobile subscriptions as part of integrated fixed–
mobile bundles will increase operators’ postpaid share of mobile
subscribers, and thus revenue.
Thailand Telecoms Summit 2016: building blocks for successful operator strategies
© Analysys Mason Limited 2016
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Stephen Wilson
Principal Analyst
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