EY - Inside Telecommunications - Issue 14

Inside Telecommunications - Issue 14

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EY - Prashant Singhal

In this issue we explore industry themes including telco big data services, network virtualization initiatives, online piracy and antitrust reviews of in-market mobile mergers.

Prashant Singhal
Global Telecommunications Leader

 

The second quarter of 2014 has seen news flow accelerate across a number of industry domains. Antitrust remedies to mobile mergers have been in focus, and the European Commission’s green light to consolidation moves in Germany and Ireland could pave the way for in-market mergers elsewhere, with encouragement of mobile virtual network operators (MVNOs) as a measure to support competition levels.

Meanwhile, many operators are building scale and capabilities in the residential bundle market, with transactions in Europe and the Americas underlining the need for new customer touch points in pay-TV. Yet the battle for the home is extending beyond traditional bundle packages, with smart home solutions now the scene of many converging ambitions. In August, South Korea’s Samsung acquired SmartThings, following other technology giants into a rapidly evolving segment.

Operators are also moving into adjacent markets in greater numbers, with incubator initiatives opening up new forms of market entry as carriers carve out new roles as supporters of innovative start-ups. Notable recent moves include Deutsche Telekom and Orange’s plans to collaborate over their respective accelerator programs and the Philippines Long Distance Telephone Company’s (PLDT) strategic tie-up with Germany’s Rocket Internet with online and mobile payment solutions in mind.

Organizational overhauls are also supporting operator ambitions in the information and communications technology (ICT) landscape. In May, Norway’s Telenor announced a new Group Strategy and Digital Unit in order to boost its responsiveness to customer needs.

Earlier this year, Telefonica introduced the role of chief commercial digital officer in order to spur revenue growth while streamlining its digital unit into a new Global Corporate Center.

Leaner operating models and new leadership roles designed to spearhead digital growth are becoming ever more important for telcos, particularly those with large footprints incorporating markets at different stages of maturity. However, operators’ core businesses face plenty of challenges, particularly on the mobile side.

As operators look to boost speeds further via LTE-A deployments and the industry at large invests in 5G R&D, it is clear that operators will have to ensure that busier networks do not lead to deteriorating performance. According to OpenSignal, average speeds in the US – the first country to launch LTE – have fallen despite infrastructure improvements.

Looking beyond mobile data performance, voice connectivity also remains a challenge – one study has showed that one in five UK mobile users experience dropped calls at least once a week. In this light, current voice over LTE (VoLTE) initiatives will have an important role to play in improving the customer experience.

As operators look to tap into new demand scenarios in ICT, they must not lose sight of their core competencies.


EY - Adrian Baschnonga

Adrian Baschnonga
Lead Analyst
Global Telecommunications Center