Coleago Consulting: Chris Buist's 2014 Trends

In markets where there is a dominant mobile operator, it is likely that the industry will begin to see wholesale LTE networks being launched in order to address any concerns the operator has regarding the roll out of rural mobile broadband coverage and to assist with the ability to allocate spectrum fairly.

Due to the public private partnership between the government and Korea Telecom it is expected that Rwanda will be the first to launch in 2014. Kenya and Mexico are also considering public private partnerships so it is possible that they will follow Rwanda’s lead in launching their own wholesale LTE networks in 2015. Some commercial operators may also go down the wholesale LTE route. However, it is unlikely that these will be in the forthcoming year.

Voice and SMS year-on-year revenue declines will become the norm in all but African markets

Africa’s mobile industry is at an earlier stage than most regions, and so faces the highest potential growth with voice and SMS. Whereas voice and SMS revenues year-on-year are already declining in a number of mature markets, this is likely to continue across the globe in 2014. Although data revenues will grow, the additional cost of carrying data will not be enough to offset the decline in voice revenue. This will lead to more operators sharing networks in 2014 in order to reduce costs and in some cases, will lead to mergers and acquisitions.

Consolidation will accelerate in developed markets as rates of growth continue to slow

In 2014 and beyond, the mobile industry will begin to see consolidation across any markets that have more than three operators working. The increase in mergers and acquisitions will be primarily driven by the EBITDA squeeze resulting from the increasing costs of delivering data traffic, stagnant or falling voice revenue and only slow growth in data. Mergers and acquisitions may also be seen between fixed and mobile operators. The reasons for mobile operators to take this approach includes increasing transmission capacity for mobile operators to deliver more data traffic, offering enterprise customers a complete mobile and fixed offering, and finally, operators may also be able to offer additional content to users. The latter may also lead to mobile operators merging with cable companies.

Fixed line and cable operators increasingly encroach on the mobile space through apps

Fixed line and cable operators may use Skype-like apps to become OTT providers thus bringing mobility and enhanced functionality to their service offering. For operators who also offer TV, this may integrated into a TV anywhere app offering customers access to residential telephone and TV services outside the home.   

 

Chris Buist is the Director of Coleago Consulting.

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