PRESS RELEASE: ERICSSON’S TOP PREDICTIONS FOR THE TELECOMMUNICATIONS INDUSTRY

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PRESS RELEASE: ERICSSON’S TOP PREDICTIONS FOR THE TELECOMMUNICATIONS INDUSTRY

3 January 2012 No Comment

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What will the telecommunications industry in Southeast Asia and Oceania be like in 2012?

Ericsson shares its insights on the top telecommunication trends for the market. “Drawing on our regional network experience, global research, internal analysis and external references, we have identified ten key trends for 2012 with regard to devices, networks, applications, and industry trends,” Elie Hanna, President and Country Manager for Ericsson Philippines, reveals.

From among these ten trends, Ericsson identifies a necessary shift in business models for mobile broadband, the growth in cloud-based offerings, and increasing collaboration between operators and over the top (OTT) players as the top three areas to watch.

“Considering the challenges many operators face where data traffic outpaces revenue growth, Ericsson sees that mobile broadband operators will need to adopt different business models to drive revenue growth as markets mature and the level of differentiation between competitors narrows.” Hanna explains.

“The coming 12 months will see mobile broadband operators borrowing from innovative business models already applied to financial services and airline industries, involving loyalty, user preferences and service customization, as well as defining offerings tailored to the needs of enterprise and SMEs.”

At the same time, operators are dealing with strong growth in smart devices, placing massive demands on networks. “Those operators that have modernized their networks to 3G/HSPA and LTE, will benefit with more cost-effective data delivery and the ability to better meet customer performance expectations,” Hanna says.

As improved broadband capacity helps to overcome network bottlenecks, Ericsson also foresees that cloud-based offerings from telecom operators and ICT providers will continue to grow. Operators can leverage their network based advantages and strengths in managed services to differentiate their cloud-based service offerings, as well as provide collaboration opportunities with other industries.

Hanna says that “we see great opportunities for telecoms operators to commercialize those cloud applications and open up opportunities in traditional markets such as outsourced billing for over-the-top-players, or as a vehicle to enter emerging segments like cloud-based M2M platforms to support various industries.”

“Looking past 2012, as services continue to move into the cloud, it will be increasingly important for operators to offer secure, reliable access while maintaining service continuity, irrespective of fixed or mobile access.”

Also in the area of applications, 2012 will see LTE operators offer smartphones offering VoLTE, heralding an era of high-quality mobile VoIP, Leverating IMS, calls can be moved with ease from PC to mobile to fixed phone.

Looking at Mobile Money and payments, Ericsson sees partnerships with telecom operators as key to success of near field communications (NFC) based mobile money applications. In addition to network advantages, operators possess efficient handset distribution channels, billing trust and customer relationships, secure profiles and location information which can all be used to increase the security of electronic transactions.

In other industry sectors, the rise of LTE as the 4G standard will increase its attractiveness as a legitimate alternative to propriety communications technologies and solutions for industries such as utilities and public safety. Ericsson predicts that utilities such as gas and water will follow the early lead of electricity distributers in some markets, by harnessing LTE for their wireless communications needs, by collaborating with mobile operators, and in some cases investing in their own infrastructure.

Ericsson also shares that the consumer and broader electronics sector, driven by economy of scale efficiency gains, will increasingly embed mobile broadband in consumer and M2M devices, leading to exponential growth in the embedded mobile broadband ecosystem – across 3G and 4G networks. Embedded mobile broadband will not be limited to LTE only; in fact many machine-to-machine (M2M) applications today still run on GSM or EDGE, with higher data demanding applications leveraging WCDMA and HSPA. Operators then need to look at multi-device subscription models and explore opportunities to work closely with other industries that will be keen to leverage mobile broadband in their business operations.

The 2012 predictions cover a wide range of predictions that provide some insights into business growth and new business opportunities across the telecommunications and other industry sectors.

Ericsson is pleased to add these insights to those produced by others in the sector to contribute to discussions about ICT trends and benefits for business and broader community.

2012 PREDICTIONS:

Operators will need to adopt new mobile broadband business models to drive profitable growth. Traditional business models based on price, speed and volumes are becoming less effective. The telecom industry will look to replicate commercial models successfully deployed by other industries, such as financial services and airlines.
Operators will increase cloud service offerings. Operators can leverage their network-based advantages and strengths in managed services to differentiate their cloud based service offerings. Three major roles for telecom operators are to: manage the cloud connectivity, deliver cloud-based capabilities and, importantly, leverage network assets to enhance cloud offerings. Major telecom operators in Singapore have already launched cloud services and we expect most operators to embrace cloud in their strategies in 2012.
Collaboration likely to occur in converged services – The battle for delivery of content on any screen, between operators and over-the-top (OTT) services providers will continue, but there will be greater collaboration in order to leverage network capabilities to optimize the viewing experience and integrate a broader range of network services enablers to enhance the customer experience. On-demand and over-the-top TV solutions continue to grow in desire for watching TV anywhere, at any time, on any device.

Singapore’s leading media company MediaCorp has already announced a trial for 1^st quarter 2012 involving a new interactive service delivered over broadband. Known as “Toggle”, the interactive service will integrate online and traditional TV entertainment experience by delivering content to the subscribers’ preferred devices such as a “Connected TV”, computer, tablet device or mobile phone.

Embedded Mobile Broadband Growth. Driven by increasing business integration of ICT to deliver efficiency and productivity, key growth areas for embedded mobile broadband in 2012 will be notebook computers, cameras, e-book readers, fixed wireless terminals, mobile health devices as well as smart meter applications. Tablet devices will accelerate the eBook revolution in Singapore.
Explosive Growth in Tablets and Smartphones. Worldwide tablet momentum will show no sign of abating in 2012, with the number of tablet subscription expected to grow 10 times in the next five year. It is well known that Singapore has one of the highest take-up of smart devices – and this growth in tablets and smart phones will put pressure on networks to provide high performance to meet device capabilities.
LTE goes mainstream. Operators will continue to deploy LTE both to enable differentiated service levels to consumers and as a cost effective means of handling data growth. Growing LTE device ecosystem will support take-up and makes this a hot area to watch.
Operators start to plan for HetNets. 2012 will see operators in this region starting to think about their HetNet strategies. Hetereogeneous networks refers to coordinated cells of varying capacities and sizes – designed to alleviate base station mobile traffic congestion and to enhance network coverage and improve performance. We see that operators will be closely monitoing data traffic growth and identifying where they will benefit from HetNets in future.
Mobile voice will be available over LTE – LTE operators will offer smartphones supporting Voice Over LTE (VoLTE). VoLTE will provide high quality IP voice services, and not fixed and mobile telcos, it will enable true fixed-mobile convergence for the first time. Leveraging IMS, calls can be moved with ease between platforms – from PC to mobile to fixed phone.
Operators play a key role in success of mobile money – Near field communications is expected to come of age across Singapore, with telecom operators, handset manufacturers and operating system vendors, banks and credit card companies as well as payment platform providers contesting for market share. We see this being applied across retail and point-of-sale terminals and taxis for example, that will be able to accept contactless payment from NFC enabled phones.
Other utilities will follow the early lead of electricity sector in other markets and look at harnessing LTE for their wireless connectivity needs. The pre-eminence of 3GPP standards for HSPA + and now LTE networks has made these wireless standards dominant in the global market, guaranteeing that they represent the lowest cost and safest future choice not only for mobile network operators but also other industries.