The Role of 4G in Mobile Data Monetisation


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In this presentation, Ronan de Renesse explores various scenarios where 4G retains the ability to help drive mobile data revenue growth, but without the heavy price tag. It was delivered at an event organised by Cambridge Wireless entitled '4G and Beyond: The Mobile Landscape in the UK after the LTE Auction' in London, UK, on 8 May 2013.

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The Role of 4G in Mobile Data Monetisation

  1. 1. Source: Analysys Mason, 2013The Role of 4G in Mobile DataMonetisationPresentation for Mobile Broadband SIG8th May 2013 • Ronan de Renesse, Principal Analyst
  2. 2. Source: Analysys Mason, 2013Smartphones take a large share of data revenuesbut LTE has more value to offer to MBB2Share of mobile data connections and revenues by device type – UK, 2008 and 2012The Role of 4G in Mobile Data Monetisation0%10%20%30%40%50%60%70%80%90%100%Connections DatarevenuesConnections Datarevenues2008 2012Mobile broadbandSmartphonesLTE
  3. 3. Source: Analysys Mason, 201301234567201020112012201320142015201620172018Numberofconnections(million)Large-screen (LS) Mid-screen (MS)Tablets are driving a major shift in mobilebroadband device mix▪ New market data led us to reduce ourMBB forecast significantly▪ Key assumptions:– Tethering replaces dongles– Connected tablets replace laptops +dongle– Competition from WiFi– Attractive fixed broadband bundles▪ Shift in spend and mobile dataconsumption, not an absolute decline▪ Residential complementary connectionsare most exposed3Mobile broadband forecast by devicetype, UK, 2010-2018The Role of 4G in Mobile Data Monetisation
  4. 4. Source: Analysys Mason, 2013Tablets could contribute more4Tablet owners by device capabilities -UKTablet owners by device origin – UK newtabletsSource: Connected Consumer Survey, 201345%36%19%Wi-Fi only3G - connected3G - not connected22%49%29%Service provider (operator)3rd party (retailer)Gift (family and friends)The Role of 4G in Mobile Data MonetisationLTELTE
  5. 5. Source: Analysys Mason, 201333% of UK smartphone owners also have a tabletand a laptop5UK smartphone panel by tablet andlaptop ownershipConnectable device ownership for UKsmartphone usersSource: Connected Consumer Survey 20132%59%33%6%Tablet LaptopTablet & Laptop NeitherThe Role of 4G in Mobile Data Monetisation0%10%20%30%40%50%60%70%80%90%100%LaptopPMPHHconsoleTableteReaderShareofUKsmarphonerespondentsLTE
  6. 6. Source: Analysys Mason, 2013Multi-device works in the US but can it beapplied to Europe?▪ AT&T and Verizon launched in 3Q 2012– 2 million subscribers signed up forAT&T’s plan first 2 weeks after launch.– 90% of AT&T smartphones are on ashared plan, more than a quarter are ona 10GB per month plan.– Verizon has changed its reporting to‘average revenue per account’ (ARPA),reporting an average of 2.64 deviceconnections per account.– AT&T reports an average of 3 devicesper account.6Price per gigabyte of selected mobiledata plans, USADataplanPrice per gigabye (USD)AT&T‘Mobile share’Verizon Wireless‘ShareEverything’1GB85(40 + 45 perphone)90(50 + 40 perphone)6GB20.33(90 + 35 perphone)20(80 + 40 perphone)10GB15(120 + 30 perphone)14(100 + 40 perphone)20GB11.5(200 + 30 perphone)Offered, but notquotedThe Role of 4G in Mobile Data Monetisation
  7. 7. Source: Analysys Mason, 20130%5%10%15%20%25%30%35% PolandUKSpainUSAFranceGermanyPercentageofrespondentsLS only MS only LS & MS Tethering Personal hotspotEurope responds better to tethering than multi-device tariffs7Share of respondents using MBB services, mobile hotspots and tethering – October 2012Source: Connected Consumer Survey 2013The Role of 4G in Mobile Data MonetisationLTE
  8. 8. Source: Analysys Mason, 2013Mobile data pricing strategies are capital tosecure future mobile data monetisation paths8Unlimited (capped or throttled)Maximum availablespeedReduced speedsMore usage atmaximum speedMonetisation pathOpenly advertised data allowanceMore usage atmaximum or reducedspeedLimited usage atmaximum speedNo more usage until nextbilling periodMonetisation pathTruly unlimitedMaximum available speedMonetisation pathHigher-speedusageThe Role of 4G in Mobile Data MonetisationLTE LTELTE
  9. 9. Source: Analysys Mason, 2013UK view: volume-based (EE) versus unlimited(3UK)9iPhone 5 32GB 24 months TCOSIM-only smartphone 12 & 1 month deals-2004006008001,0001,2001,4001,6001,8002,0000 5 10 15 20Totalcostofownership(GBP)Data allowance (GB per month)EE 3UK_5003UK_2000a 3UK_2000b3UK_2000c-102030405060700 5 10 15 20Monthlyfee(GBP)Data allowance (GB per month)EE 3UK_2003UK_600 3UK_2000The Role of 4G in Mobile Data Monetisation
  10. 10. Source: Analysys Mason, 2013How long will 4G price premiums hold for?10Allowance versus access charge for entry-level 4G LS MBB services – Q4 2012The Role of 4G in Mobile Data Monetisation
  11. 11. Source: Analysys Mason, 2013Market drivers and inhibitors for 4G adoption11Service availability− Network coverage− Number of operators with LTEService/Network quality− It’s not just about speeds (e.g. VoLTE,VAS services)Cheaper mobile data charges− 3G/4G tariff differentiation to disappear2 years after launch, quicker forhandsetsDevices− LTE devices should be made availableto customers as soon as possibleExpensive mobile data charges− High 4G price premium hinder overalladoptionLack of devices− Not that many devices yet available on800MHz and 2600MHz− 4G devices too expensiveThe prepay market− 46% of UK handset connections are onprepay tariffsDevices on long replacement rates− Tablets have longer replacement ratesthan smartphonesThe Role of 4G in Mobile Data Monetisation
  12. 12. Source: Analysys Mason, 20134G UK forecast – 47% of mobile connections will4G active by the end of 2018124G UK forecasts by device type, 2010-2018The Role of 4G in Mobile Data Monetisation0%5%10%15%20%25%30%35%40%45%50%01020304050602012 2013 2014 2015 2016 2017 20184Gshareoftotalconnections(%)4Gconnections(million)4G M2M4G MBB4G handsets4G% of total
  13. 13. Source: Analysys Mason, 2013Thank you13Ronan de RenessePrincipal AnalystRonan.deRenesse@analysysmason.comTwitter: @Ronan_AMThe Role of 4G in Mobile Data Monetisation