Month: September 2018

Analyst warns 5G alone unlikely to yield high rewards

LIVE FROM GSMA MOBILE WORLD CONGRESS AMERICAS 2018: The launch of 5G services will offer limited price upside compared to early 4G launches, GSMA Intelligence research director Pablo Iacopino (pictured) warned, as he urged operators to use the new network technology to offer a wider range of services.

Speaking at the GSMA Intelligence Americas Summit, Iacopino noted 5G was set to launch faster across many markets than the majority of the mooted services expected to drive future revenues.

“Immersive reality [for example] is far from an acceptable user experience,” he said. “The challenge for operators is to monetise 5G from the consumer segment, as faster speed on its own has minimal price uplift.”

He went on to note the increase in consumer prices following the launch of 4G was short-lived, especially in markets where launch prices for 4G were much higher than existing 3G services.

“4G will pay the bills for the next ten years which means 4G will account for the lion’s share of operator revenues,” he added.

The analyst noted operators should avoid selling 5G as a consumer proposition in its own, as it was unlikely to be a compelling offer. Instead, he recommended linking it to other products and services.

Potential technologies Iacopino expects to be supported (and potentially sold alongside 5G) include: IoT, 8K television, immersive reality, artificial intelligence and advanced gaming.

SDxCentral: 5G Adoption in US and Canada Will Outpace Asia, Europe

There will be around 200 million 5G mobile connections in the U.S. and Canada by 2025, according to a new report, The Mobile Economy North America 2018, from GSMA Intelligence. These 5G connections will account for 49 percent of the projected total market by 2025, pushing the 5G adoption rate in North America ahead of Europe, China, Japan, and South Korea.

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ZDNet: Nearly half of US mobile connections will be on 5G by 2025

The US is poised to lead the world in 5G adoption, according to a new report from the GSMA, a trade association that represents mobile network operators worldwide.

By 2025, 49 percent of all mobile connections in the US are forecast to be running on 5G, according to the Mobile Economy 2018 report. That’s compared to around 41 percent in Canada and 30 percent in Europe and key Asian markets.

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Verizon SVP pushes for purchases not partners

LIVE FROM GSMA MOBILE WORLD CONGRESS AMERICAS 2018: Striking partnerships for IoT launches and moves into vertical markets could restrict the long-term benefits from successful ventures, Verizon Connect SVP product strategy Jason Koch (pictured) warned, adding acquisition of companies already in the sector could potentially be a more lucrative strategy.

Koch, whose former company was one of several bought by the operator to form what is now the Verizon Connect telematics division, said although acquisition may be a better route to success in the IoT ecosystem, it was also a more challenging one.

“It’s easy to partner with a third party to bring a solution to market, you just give up a bunch of the value capture when you do it,” he said. “You also give up the future value that you may not understand what it is today – especially with software and technology that changes so quickly, you don’t really know what you have at this moment.”

Speaking at the GSMA Intelligence Americas Summit on the eve of Mobile World Congress Americas, the executive said when assessing acquisition targets, it was important to bring in those with a “full stack” solution in place rather than just the infrastructure.

He also warned operators that building solutions themselves may prove problematic.

“You see it all the time,” he noted. “Companies think they have a core competency so they try and build something. After they try, and sometimes fail, they think maybe that wasn’t their core competency so they partner with somebody.”

Koch concluded: “Every company has to pick their own strategy based on time to market, known quantity, established business case. The easiest decision and lowest risk decision is to go partner, it’s not always the best long term strategy.”

US, Canada to lead global move to 5G

LIVE FROM GSMA MOBILE WORLD CONGRESS AMERICAS 2018: North America will dominate global 5G take-up by 2025, with around 200 million connections in the USA and Canada representing 49 per cent of the region’s projected total mobile market by that point, the GSMA predicted.

A new Mobile Economy report from the Association forecast North America will be significantly ahead of Europe (30 per cent) and key Asian markets including China, Japan and South Korea (30 per cent, aggregate). The 200 million milestone will be double a forecast of 100 million connections expected to be hit in late 2022.

The findings reflect the progress the US, in particular, is making in 5G, with operators AT&T [1] and Verizon [2] expected to launch commercial networks this year, the first in the world. Operators in Canada are tipped to launch 5G in 2020.

Between 2018 and 2020, mobile operators will invest $122 billion in capex in North America, mostly driven by network maintenance and early 5G rollouts which are likely to require densification through small cell deployments, new antennas and transmission upgrades.

The Association also found that the number of unique mobile subscribers in North America exceeded 300 million in 2017, representing 84 per cent of the population and the second-highest subscriber penetration rate globally behind Europe. The subscriber base is forecast to increase to 328 million by 2025, lifting the penetration rate to 86 per cent.

Meanwhile the number of IoT connections in North America is forecast to almost triple between 2018 and 2025, reaching almost 6 billion.

Economic contribution
This growth is also resulting in a strengthened contribution to the region’s economy. By 2022, the mobile industry’s economic contribution is expected to increase 32 per cent to $1.1 trillion, or 4.9 per cent of GDP, up from $833 billion (4 per cent of GDP) in 2017, driven by increased productivity and the ongoing digitisation of industry and services.

North America’s mobile ecosystem also supported nearly 2.4 million jobs in 2017 and was responsible for $114 billion in public sector funding via general taxation (not including funds raised by spectrum auctions).

High subscriber penetration coupled with historically high consumer spend on mobile services means the mobile market in North America generated $260 billion in revenue in 2017. The US is the largest market worldwide in terms of revenue, about 40 per cent greater than China; bigger than the entire European mobile market; and larger than CIS, Latin America, MENA and Sub-Saharan Africa combined.

[1] https://www.mobileworldlive.com/featured-content/home-banner/att-names-cities-and-vendors-as-5g-plan-progresses/
[2] https://www.mobileworldlive.com/featured-content/home-banner/us-players-set-5g-battle-lines-for-mwca-showdown/

GSMA Intelligence shows off its megamind

LIVE FROM GSMA MOBILE WORLD CONGRESS AMERICAS 2018: GSMA Intelligence is touting its latest set of megatrends tipped to shape the industry to 2025, and it’s no surprise to see 5G dominating the list.

The analyst house predicts 5G will account for about 15 per cent of global mobile connections by 2025, but will be driven by only a handful of markets: China, Japan, South Korea and the US. Europe could be a 5G leader too, but only if spectrum availability and fragmentation issues are resolved.

And the 5G opportunity is shifting to the enterprise: “5G and IoT will open up new opportunities in a range of enterprise sectors, and an additional 10 billion industrial IoT connections will be made between now and 2025,” GSMA Intelligence noted in the report. “This will also drive a shift to decentralised and edge computing, which will bring telcos and cloud players (particularly Amazon and Microsoft) into a mix of competition and partnership in servicing the vast range of enterprise sectors, overhauling operations with advanced connectivity and analytics.”

Mobile first
Other areas of note include a claim that the next generation of internet users will be mobile only. By 2025, 3.7 billion people (72 per cent of the global internet base) will be accessing the internet exclusively via mobile. Around half of new users coming online over this period will come from just five markets: China, India, Indonesia, Nigeria and Pakistan.

GSMA Intelligence also believes connectivity will be commoditised in the IoT era. Providing connectivity will account for only around 5 per cent of the global IoT revenue opportunity by 2025 ($51 billion). The vast majority of growth, it argues, will come from the applications, platforms and services layer, which will account for more than two-thirds of IoT revenue ($754 billion).

Content strategy
In light of the fact content is a very expensive game to play in, the analyst company believes partnering or licensing content is a more realistic prospect for operators than acquiring or creating their own content. Given that Netflix spent $6.3 billion on original programming in 2017, not far behind Time Warner ($8 billion), Fox ($8 billion) and Disney ($7.8 billion), few are likely to argue with this advice.

Finally, the data experts argue that volume growth is clearer than revenue growth. An additional 16 billion IoT connections (industrial and consumer) will be added by 2025, alongside ongoing 4G and 5G connections growth. However, until fresh revenue streams are unlocked in these new areas, GSMA Intelligence believes the revenue outlook for operators is modest. Global mobile revenues topped $1 trillion in 2017, but revenue growth is likely to stay at around 1 per cent a year in the period out to 2025.

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Wall Street Journal: Samsung Joins Race to the Bottom for Global Smartphone Prices

Samsung Electronics Co. is building the world’s largest phone factory in India in an effort to tap the industry’s next growth area: cheap smartphones.

After waging a decade long battle with Apple Inc. for the world’s most affluent consumers, the South Korean electronics giant is now looking to fend off Chinese companies trying to dominate the market for inexpensive phones. That market is twice the size of the high-end market but offers lower profitability.

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#TheDataPoint: Outlook on the Indian mobile market

This week on #TheDataPoint, GSMA Intelligence turns to India, where a newly released report by the 5G High Level Forum and a rebrand of Google’s mobile payments app both reflect what’s shifting in this highly dynamic market, and the opportunity it presents for market growth.