If you haven’t yet decided where you’re going to take your summer holiday this year, I have some good news and some bad news. I’ll start with the bad: time is running out. Seriously; you’ve got about a month before the unofficial end of summer.

The good news? Time hasn’t run out yet. Technically, summer lasts until the latter part of September, giving you ample time to pick a place, book your accommodations and get there. And while I can’t tell you where to go, I can make a pretty rock solid suggestion. Consider going somewhere significant in terms of mobile. A market which either teaches you something about mobility or carries some sort of historic weight. If you’re reading this, I shouldn’t have to explain why this is a good idea. Heck, it might even be a tax deduction or something you could expense.

Still need some more direction? Okay, here you go with my picks for summer 2018, including a few reasons why the whole family (not just wireless fans) might be interested.

Australia/New Zealand: Why? Per the latest update to the GSMA Mobile Connectivity Index [1] (powered by GSMAi), Australia and New Zealand come out on top, separated by about a single point. With solid networks, mobile broadband penetration over 100 per cent and incomes which support mobile usage, they provide good snapshots of mature markets where mobile broadband and connectivity are a given. Bonus Points: Kangaroos and Platypuses; great wine; super poisonous snakes (Australia); and spring skiing (New Zealand).

Uganda: Why? Our latest update to the impact of the mobile industry on the UN’s Sustainable Development Goals (SDGs) isn’t out yet, but I’ll give you a heads up on something: there’s some cool stuff going on in Uganda. Think Living Goods Uganda which uses a network of door-to-door health workers armed with mobile apps to drive improved health and well-being. Think mobile money-based humanitarian cash transfers [2] in the Bidi Bidi refugee settlement. Bonus Points: Primate tracking and safaris; Wakaliwood; and banana wine.

Sacramento, California (USA): Why? It’s one of the first markets where commercial 5G services are being rolled out – albeit based on Verizon’s 5GTF (technical forum) rather than the 3GPPs 5GNR specifications [3]. You’ll need to actively seek out these deployments and they might not be commercial when you get there. However, a trip to this early 5G market provides some cool opportunities to see how NR might compare with TF and how a new network supplier like Samsung might find its place in 5G networking. Bonus Points: proximity to Silicon Valley, Napa Valley and Lake Tahoe, the largest alpine lake in North America (for when you need to escape the sweltering summer heat).

Oslo/Stockholm (Norway/Sweden): Why? This is a historic choice. If you’re afraid that a trip to see initial 5G network launches won’t really show you much, then how about a trip to see the first LTE markets launched almost a decade ago? In the same way we all know 5G capabilities will evolve, checking out the state of LTE today in the Nordic capitals (with some of the highest 4G penetration levels in Europe) should be a telling exercise. Bonus Points: late evening daylight plus archipelago or fjord cruising; Nordic strawberry season; Trolls; Oslo Jazz Fest; and chocolate covered bugles.

China: Why? Though I’m an American, even I understand China is a big country and recommending it as a single location for a visit is silly. Point taken. But if you’re looking to understand the breadth of what you can do with IoT [4], China is a good place to start. Want to see a connected yak? Check. Want to see a connected manhole cover? Check. Want to understand how e-sim fits in? Check (look for more from us on this last point). Bonus Points: the Great Wall; pandas; beaches; Terracotta Warriors; and soup dumplings. Again, it’s a big country with a lot going on. If you can’t find something to keep the whole family busy, you’re not trying.

India: Why? At a little over 22 per cent, LTE penetration in India isn’t particularly high. Two years ago, however, the number was less than 1 per cent. All of this in a country with more than 1.3 billion people. Let that sink in for a moment. Even by 2025 it’s completely unlikely 4G penetration in India will catch up with China. Still, an opportunity to witness first-hand what happens when robust mobile broadband capabilities ramp so quickly doesn’t come around often. Bonus Points: see the notes on China above (big country with lots to see); sub-in the Taj Mahal; snow leopards; Chaat; and different beaches.

Niue (South Pacific): Why? Have you ever found yourself lecturing the kids about what it was like to live before 4G or 3G? Want to show them? Niue is one of a few markets with no (or almost no) options beyond 2G. There is WiFi in places but that’s not likely to do anyone much good when they want to post to Facebook or Snapchat (or whatever the kids are doing nowadays) when out and about. Bonus Points: caves; coves; beaches; rainforest; diving; dolphins; a golf course where pay is by an “honesty box” (if you never read another blog with my name on it, you probably know where to find me)

Greenland: Why? So you want to go to an island with almost no 3G or 4G coverage, but the South Pacific is too far, or too warm? Wonderful. Greenland is the place for you. It’s not all 2G, but it’s pretty darn close. Bonus Points: you can tell people you’ve actually been to Greenland and explain (over and over) how Greenland got the name which should have been used for Iceland.

Glasgow (UK): Why? Special events – like big concerts and sporting events – are real tests of mobile network capabilities. They’re also opportunities to leverage a solid network (and service delivery assets) in the name of services which go beyond simple connectivity. You’ve already missed the Fifa World Cup and Tour de France, but that still leaves the 2018 European Championships (part of which will take place in Glasgow) with 250,000 attendees expected. Will the networks hold up? Will carriers manage to provide “experiences?” The best way to find out is to be there. Bonus Points: Haggis; whisky; plus, I’ll be there (as a spectator, not competitor).

Los Angeles, California (USA): Why? Technically, September 12th to 14th is still within the summer. It’s also when Mobile World Congress Americas [5] is taking place. Official messaging stating the event will “bring together the brightest minds in the industry today, to imagine what tomorrow could bring” might seem like hyperbole. It’s not. And taking place in LA, it’s going to be an incredible opportunity to see the intersection of the mobile and content/entertainment ecosystems. Bonus Points: the beaches; sun; Hollywood; Beverly Hills; plus, just like Glasgow, I’ll be there too!

– Peter Jarich, head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileconnectivityindex.com/
[2] https://www.gsma.com/mobilefordevelopment/programme/mobile-for-humanitarian-innovation/humanitarian-payment-digitisation-focus-ugandas-bidi-bidi-refugee-settlement/
[3] https://www.mobileworldlive.com/featured-content/top-three/3gpp-clears-5g-for-take-off-with-standalone-nr-specs/
[4] https://www.mobileworldlive.com/blog/intelligence-brief-iot-musings-from-mwcs/
[5] https://www.mwcamericas.com/

The impact of consolidation on mobile markets continues to be a matter of debate. After all, a merger between mobile operators can drive diverse outcomes which are important to consumers: price; quality; and service innovation. At the same time, the actual impact of a merger depends on multiple factors which could leave consumers better off… or worse off.

It’s by no means a simple issue of arguing industry consolidation is good or bad. It’s a more complicated dynamic.

That’s why competition authorities have such a challenging job when assessing the impacts of a merger, making it so important to look at the outcome of past consolidation. If we understand how previous tie-ups actually affected consumers, we can better predict the effect of proposed mergers. Then we can take informed decisions to the benefit of consumers. Simple enough, right? Not quite.

To date, the evaluation on the impact of mergers on prices has produced mixed results. While some studies find significant price increases [see footnote 1], others do not find any [2]. Some find decreases in prices [3]. As for the impact of mobile mergers on investment and quality, the overall findings are clearer: no study has found that higher market concentration reduces operator investment. Instead, more recent studies have found a positive impact of mergers on network coverage and network speeds [4].

Of course, mergers in the mobile sector are back on the agenda of competition authorities worldwide. US regulator the Federal Communications Commission (FCC) is studying the clearance of a merger between the third- and fourth-largest operators in the country, T-Mobile US and Sprint [1]. The European Commission meanwhile, is looking at the merger between Tele2 and T-Mobile in the Netherlands [2]. If cleared, the merger would reduce the number of players in the country from four to three.

Both mergers are being pursued in order to reach greater scale and realise cost efficiencies, which would enable faster, more cost-effective, rollout of new technologies including 5G.

BEREC
Wading into these waters is BEREC – the European regulators’ group. In a report, Post-Merger Market Developments: Price Effects of Mobile Mergers in Austria, Ireland and Germany, published in June (the most recent four-to-three operator mobile mergers in Europe), BEREC aimed to shed light on how to think about future mergers.

And what did it find?

On prices, it sees an increase: “there is at least some evidence that retail prices for new customers increased due to the merger”. On quality, it isn’t so sure, citing “uncertain long-run effects”. A combination of “at least some evidence” and “uncertain long-run effects” might seem less than compelling. Even so, there’s real reason to argue BEREC comes up short on actually looking at prices and quality; effectively getting the story wrong.

Let’s look at some examples on the pricing front:
Austria: putting aside the fact BEREC did not consider the late 2013 spectrum auction (which could have driven prices up), pre-merger prices in Austria were low compared to other countries and this means prices in Austria had less room to decrease, regardless of the merger.
Ireland: in some cases, BEREC might have found increases, but for most periods and tariffs analysed, the study admittedly did not find a significant effect from the merger on prices.
Germany: here, BEREC itself considers the evidence of price increases to be “not very robust”. And for MVNOs, which account for about 20 per cent of the market (and have an even stronger presence among low-usage customers), BEREC acknowledges it did not include data for them.

But, let’s put prices aside for a moment. When it comes to the impact on innovation and network quality, both hugely important for consumers, BEREC presents some basic trends in network quality in Austria and Germany. That’s great, but it’s not the same as actually detailing how the merger affected the observed trends. What’s more, it fails to compare network quality with other countries.

To be fair, that’s a lot to ask. But it’s also something the GSMA has spent time on. And what did we find?

A recent GSMA Intelligence (GSMAi) study, Assessing the Impact of Mobile Consolidation on Innovation and Quality, exploring the impact of the Austrian merger found it had significant positive impacts for consumers, with accelerated coverage of 4G by 15 per cent to 30 per cent and higher speeds for mobile broadband. In a separate study, Assessing the Impact of Market Structure on Innovation and Quality, GSMAi also found consistent results for Latin America, with consumers in more concentrated markets in the region experiencing better network quality. The results speak for themselves.

In summary, there is some convincing evidence of consumers experiencing better network coverage and quality as a result of a merger, but the impacts on prices are less clear and BEREC’s recent study does not add any clarity in that regard.

We are on the cusp of 5G networks being rolled out. These bring with them the promise of lower costs, better and new services for consumers. If mergers can facilitate these investments the result can be a positive impact on consumers.

There’s a lot at stake, and competition authorities that are considering proposed mergers clearly have a tough job ahead. Will they get it right?

– Pau Castells, director of economic analysis, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] [3] CERRE 2015 [4], DG Comp 2015 [5], RTR 2016 [6], BWB 2016 [7]

[2] [8] Frontier Economics 2015 [9]

[3] [10] Houngbonon 2015 [11] and HSBC 2015 [12]

[4] [13] GSMA 2017 [14], GSMA 2018 [15]

[1] https://www.mobileworldlive.com/featured-content/top-three/t-mobile-sprint-make-merger-case-to-fcc/
[2] https://www.mobileworldlive.com/featured-content/top-three/ec-delves-deeper-into-t-mobile-tele2-dutch-deal/
[3] https://www.mobileworldlive.com#_ftnref1
[4] http://cerre.eu/sites/cerre/files/150915_CERRE_Mobile_Consolidation_Report_Final.pdf
[5] https://publications.europa.eu/en/publication-detail/-/publication/0ba81733-f193-11e5-8529-01aa75ed71a1
[6] https://www.rtr.at/en/inf/Analysis_merger_H3G_Orange
[7] https://www.bwb.gv.at/fileadmin/user_upload/PDFs/BWB2016-summary-Ex-post_evaluation_of_the_mobile_telecommunications_market.pdf
[8] https://www.mobileworldlive.com#_ftnref2
[9] https://www.gsma.com/publicpolicy/wp-content/uploads/2015/05/Assessing_the_case_for_in-country_mobile_consolidation.pdf
[10] https://www.mobileworldlive.com#_ftnref3
[11] https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=EARIE42&paper_id=108
[12] https://www.orange.com/fr/content/download/33263/1086075/version/2/file/Supersonic+13.04.15.pdf
[13] https://www.mobileworldlive.com#_ftnref4
[14] https://www.gsma.com/publicpolicy/wp-content/uploads/2017/07/GSMA_Assessing-the-impact-of-mobile-consolidation-on-innovation-and-quality_36pp_WEB.pdf
[15] https://www.gsmaintelligence.com/research/?file=0ba00039b123efd2d6f9a235d1b29074&download

In 2017, with the inaugural Mobile World Congress (MWC) Americas on the horizon, I penned a column on the topic of what it would take for the new event to be a success. What would be considered success?

Given the stakes (a reboot of the CTIA’s flagging annual show), it was a natural question to ask. After all, we all knew that when the dust settled, lots of people would be asking whether or not it had been successful and what that would mean for future iterations.

The stakes are not nearly the same for MWC Shanghai: it is no longer a new show. But newness shouldn’t be the only trigger for thinking about how we’ll look at the concept of a successful show. If nothing else, it’s a good launch pad for asking what we want to see. So, with MWC Shanghai just a week away, let’s do just that. Let’s ask what success will look like. What needs to happen and what do we need to learn?

IoT: Coming to a manhole or Yak near you
In the somewhat trumped-up war between Cat-M and NB-IoT, China has largely been a faithful NB-IoT lieutenant. Along with that has come a focus on driving IoT into new markets and new use cases and new applications. This traction is important for more than any one country or operator alone. Putting the use cases on display is important for showing operators and enterprises what is possible with IoT. It’s important to remember, however, that innovative use case demonstrations are just that – demos. They need to be followed-up with proof of a business case behind them. MWC Shanghai will doubtless execute on the first part: it will put the use cases on display. It will also need to execute on the second part of showing how to make money from them.

5G verticals: Take Your Pick (just maybe not today)
Where US operators have gained a lot of attention for their moves around fixed wireless access 5G, Asian operators have been putting their focus on mobile 5G. There’s a consumer component to that, but there’s also an enterprise component. As with China’s focus on NB-IoT, there is a real interest in tying 5G to success in the enterprise. But that’s not news, is it? Tackling vertical markets is a core part of the 5G story for operators everywhere. For MWC Shanghai to add to this narrative, it will need to do more than just talk up the opportunity for 5G in vertical markets. It will need to give evidence of how operators can execute (are executing?) on it.

AI Insights: Skynet versus Alexa versus NUGU
Even if you’re a casual follower of artificial intelligence (AI) trends and only read the mainstream media, you know that AI is a big deal in China. Headlines including Why China will win the race for complete AI) dominance?; How China is trying to become the world’s leader in AI?; How Chinese tech giants like Alibaba are bringing AI to neighbourhood corner stores show it is a national agenda.

You’ll also know there are myriad AI use cases, ranging from the apocalyptic to the mundane. Carriers can slot themselves into most of these. Take, for example, smart speaker offerings from SKT or Telefonica. Whether they should, and how they can, benefit from the work going on in China is another story MWC Shanghai will hopefully shed light on.

Consumer insights: more than phones and drones
One draw of holding a mobile-focused event in Asia is first-hand exposure to innovative consumer business models, services and devices. That means the phone you’re possibly reading this on, sure. But it also means the wacky stuff you won’t see at home: services and devices that might seem experimental today but commonplace tomorrow. That’s why there will be consumer technology tours. That’s why there will be an augmented and virtual reality (AR/VR) expo. And that’s why there will be a Chinese Skateboarding League demo.

Yet, where so many consumer demands and trends have come and gone without operators figuring out their role, seeing a clear link between this consumer technology and service provider business models (connectivity or otherwise) will be important for making this more than just fun to watch.

This might all seem like a lot to ask. Or, it might not seem like much at all: personally, I’ve got no doubt that Shanghai will deliver on all of this in some form. It really depends on how much you listen, who you talk with, and what you make an effort to actively learn about. Between the sessions, and workshops, and meetings, there will be a lot going on in Shanghai next week. That’s because there’s a lot going on in the industry and a lot of the industry’s innovation is rooted in Asia.

No matter how you define success, it should be a fun week.

– Peter Jarich, head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

The IoT has captured the public attention for better or worse. Yet, while news headlines focus on the billions and billions of consumer devices which will be connected (robots, cars, fridges, drones and so on) this is just one part of the story.

Purely connecting devices isn’t really what IoT is all about. Rather, it is about the data these devices generate – the insights derived from them and acted upon in order to create value and benefit consumers, enterprises and a wider society.

So now to answer the billion dollar question: how big is IoT?

As you’d expect from any well-hyped market, there are many, wide-ranging predictions out there. Industry observers might remember claims there will be 50 billion connected devices by 2020 (that is in two years from now…just saying). More recent forecasts point to one trillion IoT devices being built between 2017 and 2035. Of course, we have our own numbers: building on the 7.6 billion IoT connections (cellular and non-cellular) in 2017, we see the market growing more than threefold to reach 25 billion in 2025. That’s a long way from a trillion, but it’s an impressive number nonetheless.

The vast majority of these IoT devices – typically in indoor environments – are connected by unlicensed radio technologies, designed for short-range connectivity (Wi-Fi, Z-Wave and Zigbee). Licensed cellular IoT connections, though a minority of connections, will see massive growth – from 600 million connections in 2017 to 3.1 billion in 2025. For those keeping score, this translates into 12 per cent of connections being served by cellular networks. The bulk of those licensed cellular connections (60 per cent) will come from Mobile IoT, as we like to call NB-IoT and LTE-M.

[1]

While 25 billion might be a big, flashy number, what’s bigger than a billion? A trillion! And, come 2025, we see the IoT market as worth just that – $1.1 trillion.

Where will this money come from? Two-thirds will come from platforms, applications and services. Professional services will grab another 27 per cent. This leaves 5 per cent for connectivity, declining from 10 per cent today.

Depressing, right?  Well, it is if you’re a connectivity provider.

However, it’s not all doom and gloom for operators. There’s nothing stopping them from moving further up the value chain and beyond a connectivity sweet spot. In fact there are plenty of strategies and recent examples to demonstrate just that.

Enterprise pull-through: Operators have existing relationships with enterprises through the provision of communication services. These can be leveraged. In fact, integrated operators with fixed and mobile assets have sought to expand on their traditional role within the enterprise, leveraging existing sales channels to supplement communication services with broader ICT services, including cloud, security, data analytics and now IoT services. A number of operators have already expanded their IoT capabilities beyond connectivity as well. Recent weeks featured some hard-to-come-by reported figures on operators’ IoT revenue, which although aren’t impressive, indicate operators have strategies in place on how to gain a foothold in this fast growing market.

End-to-end solutions: Strengthened relationships with enterprise clients allow operators to upsell and bundle in services to play an end-to-end role in IoT service provision. In Q1 2018, KPN noted its IoT service offering, based upon its KPN Things platform, drove a 40 per cent year-on-year revenue increase. KPN’s platform combines IoT connectivity with additional services such as data and analytics, consultancy services and hardware. By offering modular building blocks and reusable solutions, and moving towards plug and play to avoid bespoke solutions, operators can easily scale up.

Mergers and acquisitions: A tried and trusted route to market is M&A to build E2E solutions. For example, Verizon’s acquisition spree started in 2012 when it bought Hughes Telematics. Recently, it resulted in the creation of a dedicated telematics unit, Verizon Connect, which also integrates its most recent acquisitions (Fleetmatics and Telogis) and positions Verizon as one of the leading telematics providers. Verizon reported $1.1 billion in IoT (including telematics) revenue in 2017, a 40 per cent year-on-year increase, equivalent to 1.2 percent of revenue, up from 0.5 per cent in 2013.

Partnerships: Another way to diversify IoT revenue is to form partnerships across the IoT value chain. During MWC 2018 Vodafone announced V-Home by Vodafone, a suite of services which combine the V by Vodafone consumer IoT system [2] with Samsung’s Smart Things open platform and includes services such as connected car, security cameras and pet tracking. Vodafone plans to expand its current country and products coverage, and launch an online marketplace for developers. This approach allows operators to address segments in which they lack a deep understanding of the market and sell services together with partners.

IoT is viewed as a key growth story for operators. However, the opportunity will not just fall into their laps. They need to chase it.

– Sylwia Kechiche, principal analyst – IoT, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2018/05/Picture5.png
[2] https://www.mobileworldlive.com/featured-content/home-banner/vodafone-launches-european-consumer-iot-play/

The recently announced tie-up between Sprint and T-Mobile US [1] attracted widespread commentary, with opinions polarising around two opposing camps.

Consumer champions and a number of industry commentators have raised concerns about a potential reduction in competition in the US mobile market and the specific risk lower income consumers, in particular, will lose out as prices rise [2].

In contrast, T-Mobile and Sprint (and some commentators) have been keen to promote the deal as an enabler for jobs and investment, and specifically as a major catalyst for 5G deployments in the US. In the words of T-Mobile CEO John Legere: “Global tech leadership for the next decade is at stake…only the combined company will have the network capacity required to quickly create a broad and deep 5G nationwide network in the critical first years of the 5G innovation cycle – the years that will determine if American firms lead or follow in the 5G digital economy.”

It is worth taking a step back and seeing the deal for what it is: a classic case of mobile consolidation between two challenger operators. Unlike the previously rejected AT&T and T-Mobile merger in 2011 [3], the current deal would see the number three and four players consolidate to create a potentially more effective competitor with greater scale.

Despite the success of T-Mobile’s “uncarrier” strategy and resultant market share gains over the last few years, along with a recent improvement in Sprint’s own operating metrics (after several years of market share losses), both companies remain sub-scale relative to the two dominant players. AT&T and Verizon jointly control just under 70 per cent of the market’s total service revenues (see image below, click to enlarge), with scale benefits also allowing them to generate higher EBITDA and free cash flow margins.

[4]But, beyond the fact of the matter, what else can we say? Are there any lessons which can help sort out the polarised consumer-centric versus investment-centric views? While we might not be able to crown either camp a winner, there are interesting parallels with the mobile operator merger completed in Austria in early 2013 which took the country from four to three carriers.

In a highly competitive market with aggressive price competition, two smaller players (Orange and 3 Austria) were struggling to gain scale and justify network investments necessitated by the upgrade cycle from 3G to 4G. The merger was ultimately approved but this was contingent upon the imposition of a number of remedies [5]. These included the sale of some spectrum holdings; the opening up of the network to new MVNOs; and the reservation of new spectrum for a planned new entrant network operator. The latter remedy did not ultimately take effect as no fourth player entered the market.

As part of the merger approval process, 3 owner Hutchison made a number of claims in support of the deal, including that it would help to deliver a number of efficiencies including improved 4G coverage and quality of services. These claims were rejected by the competition bodies as not passing the burden of proof.

The traditional approach by European competition authorities when reviewing this, and similar, mergers has been to focus on consumer pricing, particularly likely short-term movements in price. However, a recent report by GSMA Intelligence took a different approach [6], retrospectively reviewing developments in the Austrian market and with a focus on the impact of the merger on other consumer benefits, including network coverage and quality (upload and download speeds).

The results of the analysis showed that the four-to-three mobile merger in Austria intensified competition in quality-related aspects and the resultant three-player market delivered more widely available and faster 4G services than those experienced in four-player markets. It also showed that a merger between the two smallest operators in Austria allowed them to significantly outperform other operators in Europe with a similar position in the market.

There is then a clear potential read across from the situation in Austria in 2013 (with operators needing to invest in 4G network deployments) and the timing of the recently proposed deal between Sprint and T-Mobile. The US (and other regions) are in the process of contemplating the business case and rationale for 5G deployments and the economic benefits of potential technological leadership in the race to 5G. Certainly the merger pitch from two companies differs from the one normally given to the financial markets: promises of more jobs and higher investment levels as opposed to redundancies and cost savings.

Although the outcome of the regulatory review remains uncertain, the example of the Austrian mobile merger introduces a wider range of factors for consideration and could play to the more business-friendly environment promised by the current administration in the US. Certainly the Austrian example suggests that T-Mobile’s comments on 5G investment levels should not be dismissed lightly.

– David George, head of consulting, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/home-banner/t-mobile-to-lead-combined-co-in-sprint-merger/
[2] https://www.mobileworldlive.com/featured-content/top-three/us_public_seek_price_cuts_from_merger/
[3] https://www.mobileworldlive.com/latest-stories/att-and-t-mobile-usa-end-39b-deal/
[4] https://www.mobileworldlive.com/wp-content/uploads/2018/05/gsmaisprint2.jpg
[5] https://www.mobileworldlive.com/featured-content/top-three/austria-operator-consolidation-deals-completed/
[6] https://www.gsma.com/publicpolicy/evaluation-hutchison-orange-merger-austria

With 5G continuing to dominate industry headlines, it may come as a surprise to learn that the world’s ninth largest mobile market, Bangladesh, only recently launched 4G services [1]. With over 85 million mobile users, however, it would be imprudent to understate the impressive development of the mobile industry and the critical role it plays in Bangladesh.

For one, the nascent but burgeoning digital ecosystem in the country has been underpinned by large-scale and rapid adoption of mobile services since the turn of the century: mobile subscriber penetration levels in Bangladesh have risen from just over 1 per cent in 2003 to half the population at the end of 2017, GSMA Intelligence data shows.

Further, the much anticipated launch of 4G services in February 2018 heralded an important step in the evolution of Bangladesh’s mobile industry, enabling faster and more reliable internet connectivity, and offering numerous consumer, economic and social benefits. When combined with the young and dynamic population in Bangladesh, the upgrade to mobile broadband networks also creates sizeable opportunities for start-ups and investors.

Take the case of Pathao, a Dhaka-based motorbike taxi-hailing service founded in 2015: last month it raised in the region of $10 million, in an investment round led by Indonesian taxi-hailing service Go-Jek, at a valuation in excess of $100 million. From on-demand motorbike taxi services to food delivery, as Pathao expands into new cities it has continued to diversify its services and is now developing a mobile wallet app aimed at reducing customers’ reliance on cash payments, which remains the main payment method in the country.

But not only does mobile connectivity continue to transform the ways in which the Bangladeshi society functions and interacts, it is fundamental to socio-economic development and the achievement of Bangladesh’s national development plan (Vision 2021 [2]), as well as the UN’s Sustainable Development Goals (SDGs). Mobile services are helping to address major challenges facing Bangladesh, from population growth and rapid urbanisation to poverty, inequality, natural disasters and climate change. Just last week, an app being launched by children’s charity Plan International and the Bangladesh government was cited as a game-changer in the ongoing fight against child marriage, an area where Bangladesh has amongst the highest rates in the world.

So, after almost three months since services were launched, how come the initial customer response to 4G has been dubbed tepid?

A 2G market: Bangladesh is a predominantly 2G, prepaid mobile market, with some of the lowest ARPU levels in the world. Only one-in-five Bangladeshis subscribed to mobile internet services in 2017, despite 3G networks covering more than 90 per cent of the population. Therefore, while part of the 4G adoption issues relate to customer reluctance to upgrade their 3G SIM cards, the fact remains there is a significant digital divide in Bangladesh.

Affordability: In this context, affordability is a major barrier to the uptake of mobile services in the country, with a higher cost of mobile access having a greater impact on the poorest consumers. From a 4G perspective, the affordability issue is compounded by the fact that, up to now, there has been limited availability of cheap 4G-enabled handsets in the market. Part of this is due to high levels of taxes and fees applied to the mobile sector in Bangladesh, which have an impact on the affordability of devices and mobile services.

Usability, skills and content: From a consumer perspective, other factors aside from costs, such as basic and digital literacy, usability, skills (for example digital skills and confidence in learning to use basic mobile phone functions), as well as the availability of locally-available relevant content, are important barriers too.

Infrastructure: More broadly, as the 4G rollout continues, tax and spectrum barriers in Bangladesh constrain mobile operators’ ability to invest in network coverage and expansion, which can have adverse effects on consumers. As mobile broadband adoption scales over time, the increased data demand will further strain network capacity, inevitably requiring even greater access to affordable spectrum. Without this, quality of service for users will suffer, impeding the adoption of, and engagement with, digital services.

So given this, what’s the outlook for 4G, and can Bangladesh continue to achieve its goals?

[3]First, it’s important to note the 3G lifecycle still has a long way to go before reaching maturity. As we can see in the accompanying chart (click to enlarge), 3G connections are only expected to overtake 2G connections in 2020, with 4G adoption gradually accelerating out to 2025, at which point 4G is expected to represent half of total connections thanks to a combination of gradually improving affordability (driven by falling smartphone prices) and greater 4G network coverage.

While the slow transition to mobile broadband technology in Bangladesh is, in part, a matter of timing, ultimately, the pace at which the digital divide will be reduced will depend on enabling a regulatory environment which is conducive to investment and helping to alleviate affordability barriers on the part of consumers. Nevertheless, by helping to promote digital inclusion and support the delivery of essential services, there is no question the mobile industry will continue to make a vital contribution to the economy of Bangladesh and achievement of its Vision 2021 as well as the SDGs.

– Mike Rogers, Senior Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

…

For further information, GSMA Intelligence recently published the second part of a deep dive report into the mobile industry of Bangladesh which can be found by following this link here [4].

[1] https://www.mobileworldlive.com/asia/asia-news/major-bangladesh-operators-launch-4g-services/
[2] https://www.mobileworldlive.com/asia/asia-news/mobile-offers-potential-to-drive-progress-in-bangladesh/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/05/bangladesh2.jpg
[4] https://www.gsmaintelligence.com/research/2018/04/country-overview-bangladesh/664/

With 5G continuing to dominate industry headlines, it may come as a surprise to learn that the world’s ninth largest mobile market, Bangladesh, only recently launched 4G services [1]. With over 85 million mobile users, however, it would be imprudent to understate the impressive development of the mobile industry and the critical role it plays in Bangladesh.

For one, the nascent but burgeoning digital ecosystem in the country has been underpinned by large-scale and rapid adoption of mobile services since the turn of the century: mobile subscriber penetration levels in Bangladesh have risen from just over 1 per cent in 2003 to half the population at the end of 2017, GSMA Intelligence data shows.

Further, the much anticipated launch of 4G services in February 2018 heralded an important step in the evolution of Bangladesh’s mobile industry, enabling faster and more reliable internet connectivity, and offering numerous consumer, economic and social benefits. When combined with the young and dynamic population in Bangladesh, the upgrade to mobile broadband networks also creates sizeable opportunities for start-ups and investors.

Take the case of Pathao, a Dhaka-based motorbike taxi-hailing service founded in 2015: last month it raised in the region of $10 million, in an investment round led by Indonesian taxi-hailing service Go-Jek, at a valuation in excess of $100 million. From on-demand motorbike taxi services to food delivery, as Pathao expands into new cities it has continued to diversify its services and is now developing a mobile wallet app aimed at reducing customers’ reliance on cash payments, which remains the main payment method in the country.

But not only does mobile connectivity continue to transform the ways in which the Bangladeshi society functions and interacts, it is fundamental to socio-economic development and the achievement of Bangladesh’s national development plan (Vision 2021 [2]), as well as the UN’s Sustainable Development Goals (SDGs). Mobile services are helping to address major challenges facing Bangladesh, from population growth and rapid urbanisation to poverty, inequality, natural disasters and climate change. Just last week, an app being launched by children’s charity Plan International and the Bangladesh government was cited as a game-changer in the ongoing fight against child marriage, an area where Bangladesh has amongst the highest rates in the world.

So, after almost three months since services were launched, how come the initial customer response to 4G has been dubbed tepid?

A 2G market: Bangladesh is a predominantly 2G, prepaid mobile market, with some of the lowest ARPU levels in the world. Only one-in-five Bangladeshis subscribed to mobile internet services in 2017, despite 3G networks covering more than 90 per cent of the population. Therefore, while part of the 4G adoption issues relate to customer reluctance to upgrade their 3G SIM cards, the fact remains there is a significant digital divide in Bangladesh.

Affordability: In this context, affordability is a major barrier to the uptake of mobile services in the country, with a higher cost of mobile access having a greater impact on the poorest consumers. From a 4G perspective, the affordability issue is compounded by the fact that, up to now, there has been limited availability of cheap 4G-enabled handsets in the market. Part of this is due to high levels of taxes and fees applied to the mobile sector in Bangladesh, which have an impact on the affordability of devices and mobile services.

Usability, skills and content: From a consumer perspective, other factors aside from costs, such as basic and digital literacy, usability, skills (for example digital skills and confidence in learning to use basic mobile phone functions), as well as the availability of locally-available relevant content, are important barriers too.

Infrastructure: More broadly, as the 4G rollout continues, tax and spectrum barriers in Bangladesh constrain mobile operators’ ability to invest in network coverage and expansion, which can have adverse effects on consumers. As mobile broadband adoption scales over time, the increased data demand will further strain network capacity, inevitably requiring even greater access to affordable spectrum. Without this, quality of service for users will suffer, impeding the adoption of, and engagement with, digital services.

So given this, what’s the outlook for 4G, and can Bangladesh continue to achieve its goals?

[3]First, it’s important to note the 3G lifecycle still has a long way to go before reaching maturity. As we can see in the accompanying chart (click to enlarge), 3G connections are only expected to overtake 2G connections in 2020, with 4G adoption gradually accelerating out to 2025, at which point 4G is expected to represent half of total connections thanks to a combination of gradually improving affordability (driven by falling smartphone prices) and greater 4G network coverage.

While the slow transition to mobile broadband technology in Bangladesh is, in part, a matter of timing, ultimately, the pace at which the digital divide will be reduced will depend on enabling a regulatory environment which is conducive to investment and helping to alleviate affordability barriers on the part of consumers. Nevertheless, by helping to promote digital inclusion and support the delivery of essential services, there is no question the mobile industry will continue to make a vital contribution to the economy of Bangladesh and achievement of its Vision 2021 as well as the SDGs.

– Mike Rogers, Senior Analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

…

For further information, GSMA Intelligence recently published the second part of a deep dive report into the mobile industry of Bangladesh which can be found by following this link here [4].

[1] https://www.mobileworldlive.com/asia/asia-news/major-bangladesh-operators-launch-4g-services/
[2] https://www.mobileworldlive.com/asia/asia-news/mobile-offers-potential-to-drive-progress-in-bangladesh/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/05/bangladesh2.jpg
[4] https://www.gsmaintelligence.com/research/2018/04/country-overview-bangladesh/664/

Let’s return to the argument that 5G is a battle between nations – that the first markets (national or regional) to get to 5G will enjoy an insurmountable economic advantage, establishing 5G winners and losers in the near-term as 5G commercialisation takes hold.

Don’t get me wrong; I have no particular affinity for the argument. You might recall from our earlier analysis [1] that I’m somewhat suspect of the logic. Operators in different markets, after all, don’t directly compete and the technology suppliers who will power all of our grand 5G visions aren’t limited to selling their wares in their home country. Regardless, the argument isn’t losing any steam with people in positions of power. Consider recent comments from Wilbur Ross, the US Commerce secretary: “Whoever pursues it, whoever does it, we’re very much in support of 5G. We need it. We need it for defence purposes, we need it for commercial purposes.” It’s no wonder, then, that T-Mobile US and Sprint claimed 5G investment as a key driver behind their planned merger [2]. Seems like a solid way to build support, right?

Now, to be fair, there is a legitimate argument to be made for the risks of lagging too far behind in 5G. To recap our Intelligence Brief from two weeks back, a country which seriously delays on commercialising 5G could theoretically miss out on the innovations 5G networks and capabilities help to incubate. The question we posed, then, was how long of a lag would be too long?

Good news: we have an example to look at.

Similar to aspirations around 5G, 4G has been hailed as responsible for enabling a wide array of digital innovations – everything from video everywhere business models, to pervasive IoT and the sharing economy. And while, circa 2018, we might take solid LTE coverage for granted across most developed markets, it obviously didn’t get rolled out simultaneously across the globe. China, for example, might be today’s leading 4G market by subscribers, but it wasn’t always this way. So, when discussions around a Race to 5G between the US and China are invoked, it seems like looking at the history of 4G rollouts in each is a worthwhile exercise.

We all know China lagged in the race to 4G, but by how much?

[3]

[4]

Let’s look at this along two different dimensions: total LTE connections and share of connections on LTE.

China didn’t start ramping its LTE uptake until about the start of 2014 (see top chart, click to enlarge). It didn’t take long for China to reach about the same base of LTE connections as in the US (Q1 2015), but that was still four years after LTE rollouts and connection uptake began in the US.

And on the share of connections front? You could argue that this is the more important metric.

Where total LTE connections might signal the scale (and scale efficiency) opportunity, share of connections on LTE point to the technology’s reach within the market – the opportunity for LTE-driven innovations to touch people. Here, we could look at a few milestones. China reached the 25 per cent penetration mark in Q3 2015, about two years after the US (see bottom chart, click to enlarge). The 50 per cent penetration mark was hit in Q3 2016, a year after the US. But if we’re talking about a race, then the important milestone is when China caught the US, right? That would be sometime between Q3 and Q4 of 2017, more than six years after US consumers began experiencing LTE.

Clearly there was a massive lag in the Race to 4G between the US and China. And what have been the results?

Today, China maintains two of the top LTE networking infrastructure vendors. It remains a major LTE smartphone market for vendors from around the world, while generating its own top-tier smartphone makers. It’s executed on new LTE technology innovations like NB-IoT and leveraged LTE to power new business models innovations (for example, the on-demand pushbike rental craze). Ultimately, it would be hard to argue that the lag in getting LTE commercialised in China irreparably harmed the country.

That doesn’t mean there isn’t a feeling that 5G will be different, that nobody can afford to be late to the game. Because of how 5G will open up new enterprise business models. Because of how 5G will allow service providers to benefit from two-sided business models like never before – potentially on a global scale. Because of the way in which 5G is so intricately linked to massive technological movements like artificial intelligence, IoT and mass digitalisation. Because of the hope 5G can help establish competitive advantages if regulation can deliver support, not obstacles.

Hope, of course, springs eternal, no matter what past experience suggests. In this case, however, if 5G truly is a race between nations, history suggests it is much more akin to an ultra-marathon than a sprint.

 – Peter Jarich, Head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-the-importance-of-handicapping-the-race-to-5g/
[2] https://www.mobileworldlive.com/featured-content/home-banner/t-mobile-to-lead-combined-co-in-sprint-merger/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/05/gsma1.jpg
[4] https://www.mobileworldlive.com/wp-content/uploads/2018/05/gsma2.jpg

Let’s return to the argument that 5G is a battle between nations – that the first markets (national or regional) to get to 5G will enjoy an insurmountable economic advantage, establishing 5G winners and losers in the near-term as 5G commercialisation takes hold.

Don’t get me wrong; I have no particular affinity for the argument. You might recall from our earlier analysis [1] that I’m somewhat suspect of the logic. Operators in different markets, after all, don’t directly compete and the technology suppliers who will power all of our grand 5G visions aren’t limited to selling their wares in their home country. Regardless, the argument isn’t losing any steam with people in positions of power. Consider recent comments from Wilbur Ross, the US Commerce secretary: “Whoever pursues it, whoever does it, we’re very much in support of 5G. We need it. We need it for defence purposes, we need it for commercial purposes.” It’s no wonder, then, that T-Mobile US and Sprint claimed 5G investment as a key driver behind their planned merger [2]. Seems like a solid way to build support, right?

Now, to be fair, there is a legitimate argument to be made for the risks of lagging too far behind in 5G. To recap our Intelligence Brief from two weeks back, a country which seriously delays on commercialising 5G could theoretically miss out on the innovations 5G networks and capabilities help to incubate. The question we posed, then, was how long of a lag would be too long?

Good news: we have an example to look at.

Similar to aspirations around 5G, 4G has been hailed as responsible for enabling a wide array of digital innovations – everything from video everywhere business models, to pervasive IoT and the sharing economy. And while, circa 2018, we might take solid LTE coverage for granted across most developed markets, it obviously didn’t get rolled out simultaneously across the globe. China, for example, might be today’s leading 4G market by subscribers, but it wasn’t always this way. So, when discussions around a Race to 5G between the US and China are invoked, it seems like looking at the history of 4G rollouts in each is a worthwhile exercise.

We all know China lagged in the race to 4G, but by how much?

[3]

[4]

Let’s look at this along two different dimensions: total LTE connections and share of connections on LTE.

China didn’t start ramping its LTE uptake until about the start of 2014 (see top chart, click to enlarge). It didn’t take long for China to reach about the same base of LTE connections as in the US (Q1 2015), but that was still four years after LTE rollouts and connection uptake began in the US.

And on the share of connections front? You could argue that this is the more important metric.

Where total LTE connections might signal the scale (and scale efficiency) opportunity, share of connections on LTE point to the technology’s reach within the market – the opportunity for LTE-driven innovations to touch people. Here, we could look at a few milestones. China reached the 25 per cent penetration mark in Q3 2015, about two years after the US (see bottom chart, click to enlarge). The 50 per cent penetration mark was hit in Q3 2016, a year after the US. But if we’re talking about a race, then the important milestone is when China caught the US, right? That would be sometime between Q3 and Q4 of 2017, more than six years after US consumers began experiencing LTE.

Clearly there was a massive lag in the Race to 4G between the US and China. And what have been the results?

Today, China maintains two of the top LTE networking infrastructure vendors. It remains a major LTE smartphone market for vendors from around the world, while generating its own top-tier smartphone makers. It’s executed on new LTE technology innovations like NB-IoT and leveraged LTE to power new business models innovations (for example, the on-demand pushbike rental craze). Ultimately, it would be hard to argue that the lag in getting LTE commercialised in China irreparably harmed the country.

That doesn’t mean there isn’t a feeling that 5G will be different, that nobody can afford to be late to the game. Because of how 5G will open up new enterprise business models. Because of how 5G will allow service providers to benefit from two-sided business models like never before – potentially on a global scale. Because of the way in which 5G is so intricately linked to massive technological movements like artificial intelligence, IoT and mass digitalisation. Because of the hope 5G can help establish competitive advantages if regulation can deliver support, not obstacles.

Hope, of course, springs eternal, no matter what past experience suggests. In this case, however, if 5G truly is a race between nations, history suggests it is much more akin to an ultra-marathon than a sprint.

 – Peter Jarich, Head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-the-importance-of-handicapping-the-race-to-5g/
[2] https://www.mobileworldlive.com/featured-content/home-banner/t-mobile-to-lead-combined-co-in-sprint-merger/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/05/gsma1.jpg
[4] https://www.mobileworldlive.com/wp-content/uploads/2018/05/gsma2.jpg