As day two of Mobile World Congress draws to a close, please find below Ovum's analysis of announcements from QTel, Ericsson & Bharti Airtel and keynotes from NTT Docomo, Vodafone and Neelie Kroes, Vice President of the European Commission responsible for the Digital Agenda.
Get up to the minute insight and analysis from MWC on Twitter - @OvumTelecoms and our website: http://ovum.com/section/ovum-at-mobile-world-congress-2013/
QTel rebrands and outlines its bold ambitions
Carrie Pawsey, telco strategy analyst, Ovum
Qatari operator QTel has announced that it will rebrand its majority-owned operations as Ooredoo.
“The name means “I want” in Arabic and gives an indication of the aspirational nature of the new brand. In addition to Qatar, QTel has operations in Kuwait, Oman, Algeria, Tunisia, Iraq, Palestine, the Maldives, and Indonesia, and it has a total of approximately 90 million mobile subscribers.
“QTel hopes that uniting its operations under a single brand will help it to realize its ambition of becoming one of the 10 largest mobile operators in the world by 2015. It has some way to go to catch the leading players though, with the world’s largest operator, China Mobile, boasting more than 680 million subscribers. The France Telecom Group, which currently sits just outside of the top 10 in terms of subscribers, has more than 130 million mobile connections.
“In addition to growing its market share in existing operations, QTel is on the acquisition trail at a time when most operators are retrenching and looking to sell non-performing operations. The operator has already spent $4bn this year on increasing its stake in Kuwaiti operator Wataniya and Iraqi operator Asiacell. It is also rumored to be interested in Vivendi’s 53% stake in Maroc Telecom, although other established players such as Etisalat have also been linked with the operator.”
Ericsson and Bharti Airtel sign IN deal for prepaid users
Shiv Putcha, consumer analyst, Ovum
Bharti Airtel has announced that it will deploy Ericsson’s intelligent network (IN) solution across all of its 23 circles in India.
“The deal will upgrade Airtel’s network capabilities to enable it to offer realtime charging and flexible bundling options to its large prepaid subscriber base. Approximately 98% of India’s mobile connections are prepaid, and as of September 2012, Airtel had more than 178 million prepaid subscribers.
“The fact that prepaid accounts for the vast majority of connections in emerging markets is hardly breaking news. However, what is significant about this deal is that it underlines the growing importance of data services to prepaid users. Prepaid services are becoming a lifestyle choice in emerging markets rather than an economic necessity. As a result, prepaid users are increasingly demanding access to the same services and user experience as their postpaid counterparts.
“Mobile operators are increasingly finding that offering “sachet” pricing and flexible service propositions to prepaid users will generate significant new revenue streams. In addition, the ability to carry data packages across circles in India will greatly boost usage and accelerate Airtel’s ability to monetize its large 3G and LTE investments. The extension of Airtel’s strategic partnership with Ericsson must be viewed in this context.”
NTT Docomo looks to the future
Steven Hartley, telco strategy analyst, Ovum
“NTT Docomo CEO Kaoru Kato has used MWC 2013 to provide an insight into the Japanese mobile operator’s strategy. The most interesting aspect is a more realistic approach to the future in Japan and a more aggressive approach abroad.
“Kato used yesterday’s keynote address to promote Docomo’s vision of a “Smart Life” in its domestic market. Targeting eight verticals – including media, M2M, and health – the operator’s purpose is to open the network to application developers. The target for NTT Docomo is to derive new service revenues of $11bn by 2015.
“Docomo’s strategy is similar to Verizon Wireless’s decision to open its network back in 2007. Like that announcement, there will no doubt be speculation as to exactly how open Docomo’s network will actually be.
“However, it is a required step that Ovum has long advocated. Even operators that area as powerful as NTT Docomo is in its domestic market have to face the reality that enabling application development on their networks broadens the application base. This in turn makes operators more attractive to end users, be they enterprises or consumers.
“The second part of the announcement signals a reawakening of Docomo’s global ambitions. In response to Softbank’s move to acquire Sprint in the US, Kato stated that Docomo is interested in buying mobile operators following a flurry of content-focused acquisitions in recent years. No further details were provided as to the funds available or the regions preferred, but Kato did hint that Docomo’s previous strategy of taking minority stakes may be revised.
“Ultimately, Softbank’s disruptive strategy has rattled Docomo at home and abroad, forcing the operator to respond. It has scale and expertise that could lead to busy times ahead for deal advisers.”
Pragmatic Vodafone outlines a unified vision for Europe
Emeka Obiodu and Carrie Pawsey, telco strategy analysts, Ovum
Speaking at MWC 2013, Vodafone CEO Vittorio Colao said that the operator will be rolling out “unified services across Europe” and that it was looking at a number of acquisition targets.
“This lends further weight to the rumors that the operator is about to buy Kabel Deutschland, Germany’s leading cable operator. If the rumors are true, it will move Vodafone into the pay TV space and further entrench it in the fixed domain.
“It is no secret that Vodafone’s European operations continue to struggle. Colao’s speech echoes Ovum’s comment published last week “Vodafone’s pragmatism continues to shine through” in which we said that Vodafone and its European peers must stabilize their performance in Europe before looking for gains elsewhere. If this means scavenging for gains in areas where telcos have previously not had an interest, then so be it. If Vodafone becomes Germany’s largest pay TV provider, what is to stop it from doing the same elsewhere? Should Vodafone become an active player in fiber rollouts? Should it launch a fixed wireless access service using TD-LTE on its recently acquired spectrum in the UK? Or should it look to acquire the rights to broadcast Premier League football in the UK or the Bundesliga in Germany?
“None of these, as far as we are aware, is on the cards. But given the nature of the new Vodafone, we would no longer be surprised if any of them, or even more obscure things, happened. Surviving in Europe is the goal and anything that helps to achieve that goal is fair game.”
Neelie Kroes repeats her call for a single market for telecoms in Europe
Matthew Howett, telecoms regulation analyst, Ovum
Neelie Kroes, Vice President of the European Commission responsible for the Digital Agenda, has used her keynote speech at MWC 2013 to reiterate her vision of a single market for telecoms in Europe.
“Kroes believes that a fragmented regulatory environment and inconsistent application of the rules is hampering investment and innovation, and that increased harmonization is the only answer.
Certainly a more through implementation of the existing framework is desirable, but Ovum questions just how much operators are interested in greater cooperation beyond their existing activities. “There is no doubt that they will welcome the release of additional mobile spectrum in a fair and transparent manner – and shared use of low-powered spectrum makes sense – but we wonder whether Kroes' ideas will amount to much beyond this.
“Operators still see the network, and their ability to tweak it, as a key differentiator. As one operator claimed when the plans were first outlined earlier this year, ”it is very hard to foresee a single pan-European network, because of the [low] levels of cooperation between operators at a national level.”
“Instead, we wonder whether Kroes should direct more of her attention to the mounting tension between operators and over-the-top players.
“Over the past couple of days, we have heard a number of impassioned speeches from operators about how they are no longer prepared to be taken for a ride by those that benefit from network investments, but don’t actually contribute to them. The reality is somewhat different, and not as simple as is being made out. However, it is certainly an area that would benefit from a more objective investigation by someone that is prepared to intervene to promote a sustainable industry should the need arise.”
Jointly awarded IIAR Global Analyst of the Year 2012, Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Its research draws upon over 400,000 interviews each year with business and technology, telecoms and sourcing decision-makers, giving Ovum and its clients unparalleled insight, not only into business requirements but also the technology that organizations must support. Ovum is an Informa business.
P: +44 (0) 20 7017 7916