Cuál es el futuro de la banda ancha fija y móvil


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Cuál es el futuro de la banda ancha fija y móvil

  1. 1. Mobile broadband for fixed players Pierre Fortier 29 October 2009 Ref: 16109-434
  2. 2. 2 Table of contents Introduction The development of mobile broadband Substitution threat for fixed players Mobile business models for fixed players Conclusion
  3. 3. 3 Introduction The popularity of mobile broadband* access via USB modems and smartphones has taken European fixed and mobile operators by surprise: Q fixed operators are concerned because they are losing market share in the area that has been a major engine of growth Q mobile operators are worried because competition in mobile broadband may in some countries have driven down retail prices too far below cost In this presentation, we look into possible strategies and opportunities for fixed broadband operators associated with the development of MBB, in particular: Q the fast development of MBB Q the substitution threat of MBB for fixed operators Q the different mobile business models for fixed players *Mobile broadband and MBB are used interchangeably throughout this presentation
  4. 4. 4 Introduction The development of mobile broadband Substitution threat for fixed players Mobile business models for fixed players Conclusion
  5. 5. 5 MBB is proving popular in countries where datacards are becoming inexpensive Comparison of datacard current prices with penetration in Europe* 60 BE Price per month (EUR VAT excl.) 50 This line shows the correlation between penetration of 40 ES datacards and the price of the cheapest offer for unlimited NL usage** in August 2009 30 AT 20 DE IE UK IT 10 SE FI 0 0% 2% 4% 6% 8% 10% 12% 14% Datacards penetration (as % of population) Data cards prices (cost of 4GB) Source: Analysys Mason; * In August 2009; ** Based on cheapest contract offer available in the country in 2008 for a monthly traffic of 4GB
  6. 6. 6 MBB represents a high share of broadband connections and traffic in ‘advanced’ countries MBB versus fixed broadband take-up Growth in H3G UK data traffic in Europe (Q4 2008) 16 Broadband subscribers using fixed (%) 95 14 More than 10x data Relative traffic growth 90 NO traffic increase in UK ES 12 seven months 85 IT SE Austria is leading the 10 80 LT pack with more than FI 36% of broadband 8 75 subscriptions being IE 70 mobile 6 65 4 AT 60 2 55 0 8 ov 7 Ap 0 8 Fe 08 ar 8 ec 7 Ja 07 00 50 0 0 0 20 20 20 20 20 20 r2 0 5 10 15 20 25 30 35 40 45 50 n b ct O M N D Broadband subscribers using mobile (%) Total growth Uplink Downlink Source: Analysys Mason research division Source: H3G UK
  7. 7. 7 In this context, Analysys Mason expects subscriber numbers to keep rising fast … MBB connections in Europe MBB connections are growing fast 160 100% in Europe: 140 90% Q driven by both complementary 80% and substitutive use Subscribers (millions) 120 70% 100 Q 145 million MBB connections by 2014 60% 80 50% Q CAGR of 35% 60 40% By 2014, 60% of European broadband 30% households will have an MBB connection 40 20% 20 10% 0 0% 2013 2014 2007 2008 2009 2010 2011 2012 MBB connections Mobile share of broadband households Source: Analysys Mason
  8. 8. 8 ... with a sharp increase in the average volume of traffic per subscriber Forecast for total mobile data demand Country Data traffic per month 3000 in MB (2008) Sweden 1840 Petabytes/month 2500 Some European Portugal 1139 countries have 2000 already reached Austria 784 high data traffic 1500 Denmark 277 per month 1000 500 0 Cisco: mobile data traffic in Western 2012 2013 2008 2009 2010 2011 Europe to grow at 131% CAGR until 2013 N America W Europe Such forecasts may be slightly agressive, Asia-Pacific Japan but average subscriber use might reach Latin America C&E Europe Middle East & Africa Europe levels similar to fixed broadband Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, NITA, ECTA, PTS
  9. 9. 9 A mix of commercial and technical factors are stimulating the development of MBB • Flat-rate tariffs have triggered the take-up of MBB services Tariff evolution and the increase of traffic • Technology evolution in the radio access network (HSPA, Radio access HSPA+ and in future LTE) provides higher speeds and lower technology latency, thus improving the end-user experience • Device evolution (dongles, embedded PCMCIA data cards, Devices enhanced handsets such as the iPhone) is changing the nature of the MBB market • Connectivity solutions drive demand for MBB connectivity Services • Handset availability and MBB drive new types of services
  10. 10. Tariff evolution 10 MBB is cheaper than fixed broadband in many European markets In Austria, MBB is substantially cheaper Price comparison of MBB and DSL than DSL services retail offers (June 2008)* Cheapest MBB (EUR per month VAT incl.) 80 Play in Poland offers the cheapest MBB 70 in Europe (EUR12.60 for 5GB per month) FR 60 The lowest prices are being offered by NO new entrant 3G-only players 50 CH 0% premium French and Swiss markets have not yet 40 ES SK PT taken off BG GR 30 CZ DK BE RO Norway is a high-cost, high-GDP market LT UK DE, IE, NL, SE LV EE 20 HUIT AT FI SI 10 PL 0 10 20 30 40 DSL (EUR per month VAT incl.) * Based on incumbent DSL and cheapest MNO offering Source: Analysys Mason research division including at least 3GB download per month, at June 2008
  11. 11. Tariff evolution 11 In Austria, MBB access is a tough, low-margin game The cheap price of MBB compared to Monthly bundle prices for MBB access fixed has triggered strong growth in Bundle 500MB 3GB 6GB 10GB 15GB the Austrian MBB market prices (EUR) Fixed broadband operators have A1 10 10 - 10 - lowered prices, but net additional Orange - - - - 15 T-Mobile 10 10 - 10 - subscriptions have slowed down Tele.ring - - 12 - - significantly Note: Prices include current promotional offers The long-term sustainability of this situation is debatable Monthly prices for fixed-line broadband access Monthly price (EUR) Telekom Austria 34.90 Tele2 Austria 19.90 chello (UPC) 22.90 Inode (UPC) 17.90 Note: Fixed prices for services with equivalent speed to mobile (i.e. 3072/512 or 3MB) and unlimited data usage Source: Operators’ websites, Analysys Mason, February 2009
  12. 12. Tariff evolution 12 Other countries have not seen such cut-throat competition In the UK, fixed broadband is still Monthly bundle prices for MBB access cheaper and faster than mobile Bundle 1GB 3GB 5GB 10GB 15GB broadband for unlimited usage prices (GBP) For low usage, however, MBB can H3G 10 - 15 - 30 be better value O2 - 14.69 - 29.38 - T-Mobile - 15 - - - DSL penetration is high: Vodafone - 15 25 - - Orange 9.79 14.68 - 24.47 - Q MBB complements (rather than Note: Prices are based on 18-month contracts and include current replacing) fixed-line access promotional offers Monthly prices for fixed-line broadband access Monthly price (GBP) BT 24.46 Virgin Media 20.00 Tiscali 14.99 Sky 15.00 Note: Fixed prices for services with unlimited data usage Source: Operators’ websites, Analysys Mason, February 2009
  13. 13. Radio access technology 13 The 3GPP family is leading the technological development of MBB 3GPP evolution peak data rates per technology LTE 158Mbit/s Peak downlink rate (per sector)* (20MHz carrier) HSPA+ 80Mbit/s 42Mbit/s (4x4 MIMO & 10MHz carrier) 28Mbit/s (2x2 MIMO & 64QAM) (2x2 MIMO) HSPA 21Mbit/s (64QAM) 14.4Mbit/s 7.2Mbit/s 3.6Mbit/s 5MHz carrier 2005 2006 2007 2008 2009 2010 2011 / 2012 * Realised downlink rates are typically 2-3 times lower than peak rates Source: Analysys Mason
  14. 14. Devices 14 Cheap and attractive devices have driven the growth of mobile broadband MBB dongles Laptops and netbooks Generally offered for free with an With an MBB subscription, the price MBB subscription is generally less than EUR400, sometimes even offered for free with 24-month contracts Archos 3G+ LG X110 Samsung Q10 Asus Eee PC Source: Mobile operator websites
  15. 15. Devices 15 Device evolution will change the nature of the MBB market The Apple iPhone has revolutionised media consumption on the mobile phone: Q unmatched balance between features and performance 3G iPhone users generate on average around 2.5Gbytes of traffic per month A range of factors is likely to drive strong traffic growth: Q new products from Apple/other players Q increasing device penetration Q changing consumption patterns All trademarks and rights owners acknowledged
  16. 16. Devices 16 Non-telecoms players are also bringing new business models to mobile Amazon Kindle An e-book reader launched by Amazon in In May 2009: Kindle sales were 35% of book sales when Kindle editions are late 2007; it works over Sprint’s 3G available. Unit sales are not public, but EVDO mobile network: expected to be at 300 000 since launch Q currently no other deployments outside the USA The Kindle gives access to: Q more than 275 000 books Q major US newspapers Q more than 1500 blogs Q Wikipedia for free Users pay for each book or newspaper issue they purchase and download, not for the data traffic they generate Source: Amazon website
  17. 17. Services 17 Streaming video to the iPhone is a revolutionary experience All trademarks and rights owners acknowledged
  18. 18. Services 18 Going forward, the availability of new devices and Internet keys will drive new usage and traffic iPhone all-time top paid applications (Oct 09) Device evolution is likely to generate new applications, increasing exponentially the traffic on mobile networks Potential applications for residential users: Q mobile social networking Q games (including online games) iPhone all-time top free applications (Oct 09) Q video/music streaming and download Q gambling/adult Q peer-to-peer file sharing Q location-based services Potential applications for corporate users Q Mobile working Q Remote access to content Source: Apple. All trademarks and rights owners acknowledged
  19. 19. 19 Introduction The development of mobile broadband Substitution threat for fixed players Mobile business models for fixed players Conclusion
  20. 20. 20 In some countries, MBB is contributing to the acceleration of fixed–mobile substitution (FMS) Evolution of MBB usage Mobile-only households 50% Complementary use 35% Substitution Mobile as % of broadband connections 30% 40% 25% 30% 20% Early adopters Austria Underserved users 15% 20% Business users Italy 10% Finland 10% 5% UK 0% Russia France Italy Spain Sweden UK 0% TurkeyFrance 2003 2008 Time Source: Analysys Mason’s estimates
  21. 21. 21 For instance, this is the case of Fastweb’s ‘Joy’ offer in Italy Source: Fastweb website
  22. 22. 22 MBB appears to be both a complementary service, and a substitute for fixed broadband … Broadband subscribers in Austria In Austria, fixed broadband penetration remained flat for three quarters in 2007 2.5 Q this strongly suggests a high Broadband subscribers (million) Complementary usage proportion of substitutive and new 2.0 0.7 0.8 users 0.7 New and 0.6 0.5 substitutive According to Ofcom, in the UK at 0.4 usage 0.3 Q1 2008: 1.5 Other Q about 32% of subscribers used 1.0 1.1 1.1 1.1 Mobile MBB instead of fixed broadband 1.0 0.9 0.9 1.0 DSL Cable Q in the 16–24 age group, this proportion was as high as 47% 0.5 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.0 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Source: Analysys Mason research division Source: Ofcom (2008), Total Telecom
  23. 23. 23 … some evidence suggests that fixed broadband will remain strong despite cannibalisation Despite the strong move towards Download speed ranges for available MBB, fixed-line services will continue fixed and mobile technologies to have a significant market share of broadband going forward, due to: 1000 10 GPON Download speed (Mbit/s) Q mobile services’ limited ability to 500 GPON provide high-bandwidth services 100 (such as ‘over-the-top’ video) VDSL LTE Q market inertia 24 ADSL2+ HSPA+ Q fixed operators’ pricing strategy 10 8 ADSL2 Q fixed operators’ increasingly 4 HSPA aggressive NGA strategies 1 ADSL 0.5 GPRS UMTS 2000 2002 2004 2006 2008 2010 2012 Fixed BB speed Mobile BB speed (theoretical) (theoretical+shared among users) Source: Alcatel Lucent
  24. 24. 24 Substitution may be driven in part by a tendency for users to use mobile in the home Mobile service consumption Online video consumption Over 40% of calls are typically made Watching videos on the Internet is a from the user’s own home prime activity: Mobile TV trials by O2 in the UK Q German users: 119 videos/month show that people tend to watch TV at Q American users: 96 videos/month home or at work, but barely on the move: 36% of people used the Q French users: 88 videos/month service mainly at home However, users are really only ‘snacking’, and usually watch only a few minutes of each video Source: Strategy Analytics 2005, Swisscom, Source: Comscore November and December 2008 Innovation paper, 2004, O2, Analysys Mason
  25. 25. 25 Longer term, MBB could be a defensive move for fixed players to protect their core market Broadband-equipped sites by technology type in Europe 200 180 32 25 29 160 20 Market opportunity 16 Households (millions) 140 11 for fixed operators 6 22 32 42 50 56 59 120 12 Need to partner with 2 6 an MNO if no mobile 100 network of its own 80 117 Core market for 60 113 114 109 97 103 99 97 fixed operators 40 Under pressure 20 from MBB 0 2007 2008 2009 2010 2011 2012 2013 2014 Fixed only Fixed and mobile Mobile only Source: Analysys Mason research division
  26. 26. 26 Introduction The development of mobile broadband Substitution threat for fixed players Mobile business models for fixed players Conclusion
  27. 27. 27 MBB is beneficial for fixed players to develop complementary usage and avoid cannibalisation Protect market share Deepen the relationship with customer Moving to mobile can be seen as a Mobility allows fixed operators to offer the defensive move from fixed players to full portfolio of services (voice, Internet, limit the effect of FMS TV) at fixed locations and on the move: MNOs are challenging fixed operators: Q seamless access of residential users to their digital ecosystem Q they reach in the home to offer Internet services and voice services Q seamless access of enterprise users – the two core services provided by to their corporate applications fixed broadband operators Q Mobile devices give a strong and direct access to the end user
  28. 28. 28 Case study: Virgin Media is the UK’s first ‘quintuple-play’ operator Virgin Media’s MBB offer allows the operator to create targeted bundles: Q MBB services represent the fifth product type in Virgin’s portfolio, complementing its existing fixed broadband, fixed voice, mobile voice and TV services Q numerous service combinations are possible, allowing for greater differentiation and segmentation Q each can be offered at a substantial discount on the price of buying the services separately Virgin has already launched one bundle using its new offering – a fixed broadband + mobile broadband package that saves customers GBP10 per month, compared to buying the services separately Source: Virgin Media website
  29. 29. 29 Fixed players can leverage on their market position and strong assets to address the MBB market Some fixed broadband operators benefit from access to audiovisual content (this is particularly the case for cable operators, but also IPTV DSL players): Q this access could allow for valuable content to be delivered to mobile users Fixed operators can leverage on capillary transmission network to provide backhaul facilities to mobile only operators: Q In particular, with NGA roll-out, increased capacity in the fixed access network (VDSL, FTTH) can help relieve the mobile backhaul bandwidth crunch Cable and DSL operators would be in a unique position to take advantage of the femtocell opportunity: Q Fixed broadband operators could install femtocells with the broadband modem and can control the quality of service of the broadband connection to backhaul the mobile traffic originated at the femtocell
  30. 30. 30 Fixed players can help mobile-only operators cope with fast-growing backhaul capacity requirements Network capex and opex (%) – NPV Increasing capacity requirements generated by MBB put significant pressure on MNOs’ Costs 6% x 1.25 backhaul capacity 10% 7% in NPV This results in backhaul representing a 12% higher share of network costs’ total NPV 28% 11% ! MNOs need to invest in future-proof, next- generation backhaul technologies to flatten the cost curve 69% 55% Fixed broadband operators with VDSL/ FTTx are uniquely positioned to meet the No MBB MBB stringent HSPA/LTE capacity requirements: UTRAN+BSS Backhaul Q could provide rapid and cost effective MSC/MSS/MGW Other network wholesale mobile backhaul solutions Note 1: The main assumptions of the model are: 22% of mobile user take up an MBB subscription; average consumption per subscriber is 500MB/month Note 2: Model only uses E1 TDM links in the access network
  31. 31. 31 Femtocells could be win-win solutions for fixed operators and mobile only MNOs Femtocells allow to offload mobile traffic Integration of femtocells in a 3G network onto the fixed network, through a unit Call installed in the WiFi/DSL/cable modem Call through 3G through network Femtocell As in-home usage represents 40% of total femtocell network traffic, the impact on MNO IP backhaul can be substantial Network Femtocells could be win-win solutions for mobile-only MNOs and fixed operators: MNO Femto controller RNC Q MNOs benefit from improved service gateway coverage and reduction of macro network backhaul problem SGSN MSC IMS Q if launching an MVNO, fixed operators GGSN GMSC could monetize the traffic offload and negotiate a reduction in MVNO’s wholesale access charges Circuit-switched network Source: Analysys Mason
  32. 32. 32 Many of the main players are at different stages of femtocell trials and deployments Telefónica O2 Europe Mobilkom Austria TeliaSonera T-Mobile International (trials, 2009) (pilot project, 2009) (trials, 2009) AG (opportunity assessment, 2009) Vodafone (live since June 2009) NTT DoCoMo Verizon, live since (live since July 2009) January 2009 Sprint, live since Softbank Mobile, live September 2007 since January 2009 AT&T (trials, 2009) StarHub, live since November 2008 Telecom Italia Mobile (trials planned) Different trials are being held around the world, mainly based on the delivery of high-speed wireless data and voice services to home and business locations Source: Analysys Mason
  33. 33. 33 MBB revives the long awaited / never fully realised prospects of fixed–mobile convergence FMC has been touted as ‘the next big thing’ for several years now However, no real solution has emerged Recent market developments indicate that this could gain traction soon and change the structure of the telecoms market quite dramatically: Q major mobile operators have been investing heavily over the last two years to enter the fixed broadband market (e.g. Vodafone, Orange and O2) Q the surge of MBB is pushing operators to think about convergence in a different manner and broaden their scope from only voice services to broadband and other data-enabled applications Femtocell solutions that bridge mobile and fixed networks are now becoming a reality and will enable cost savings in the provision of mobile voice and broadband access from within the home
  34. 34. 34 Several strategies could be pursued by fixed operators in moving to MBB Recent international examples • Kabel Deutschland (Germany, 2009) • Zon (Portugal, 2008) • ONO (Spain, 2009) • Numericable (France, 2008) MVNO launch • Jazztel (Spain, 2009) • Telenet (Belgium, 2006) • Fastweb (Italy, 2008) • Wholesale femtocell launched by • Strategic partnership between Strategic Sprint and targeted at fixed-line and Vodafone and Hellas Online partnership with cable partners (USA, 2009) (Greece, 2009) mobile-only MNO • Tellas merger with Wind • Neuf / SFR integration (Greece, 2008) (France, 2007) • Cox (USA, 2008) • Free is candidate to the fourth 3G licence (France, 2010) Acquiring MNO • Videotron (Canada, 2008) licence • Telenet has expressed interest • RomTelecom (Romania, 2008) for the fourth 3G licence • RCS&RDS (Romania, 2006) (Belgium, 2010) Source: Analysys Mason
  35. 35. 35 Fixed players moving to MVNO should look into full MVNO options to maximise synergies Licensed Enhanced Full Potential Key components reseller SP MVNO MVNO MVNO positioning for a Radio spectrum fixed operator Enabling Femtocells infrastructure and network provision Network switching Possible rollout in coming years VAS to realise FMC Content and applications synergies Service Platform SIM card Billing Operations Pricing capability Provisioning Customer care Branding, Distribution sales and marketing Own brand Mobile broadband Carphone Auchan Mobile (France) Virgin MVNO examples: Warehouse (UK) Numericable (France) Media (UK) MVNO does not own MVNO may or may not own MVNO owns
  36. 36. 36 In bringing any MBB proposition to market, a number of practical issues need to be addressed Proposition development Distribution Fulfilment Technology Financial
  37. 37. 37 Introduction The development of mobile broadband Substitution threat for fixed players Mobile business models for fixed players Conclusion
  38. 38. 38 Conclusions: fixed-only operators should seriously examine moving into mobile broadband The MBB market is rapidly evolving: Fixed-only operators could benefit significantly from a move to MBB Q subscriber growth is rising strongly Fixed players could leverage valuable Q traffic growth is rising exponentially assets when moving to mobile Today, MBB market growth is based on Several mobile strategies can be explored: PC use. Going forward, devices like the becoming a MVNO; establishing strategic iPhone will increasingly change the partnerships with mobile-only MNOs; nature of the MBB market acquiring a mobile licence MBB is both a complementary and All options require a thorough assessment substituive service for fixed broadband of market potential, technology, negotiation and proposition design
  39. 39. 39 Analysys Mason is the world’s premier adviser in telecoms, telecoms, IT adviser in IT and mediaand media Analysys Mason provides strategy advice, operations support and market intelligence to leading market players Our work has had a major influence on the industry for more than 20 years: Q established many of the core principles and policies used by telecoms regulators across Europe and Asia to govern the operation of the sector Q mediated in key issues of policy for both commercial parties and regulators Q supported major transactions for operators and financial institutions Q provided operational support in the roll-out and expansion of leading operators Q delivered significant financial benefits to clients that are procuring new networks and services We excel at solving the toughest problems facing our clients in all areas of their business The benefits we deliver are based on our core differentiators of intellectual rigour, independence and operational experience
  40. 40. 40 Pierre Fortier Analysys Mason Limited 66 avenue des Champs Elysées 75008 Paris, France Tel: +33 (0)1 72 71 96 96 Fax: +33 (0)1 72 71 96 97