 |
 |
What challenges are UK mobile operators facing in the first half of 2012, and how is the mobile carrier market in the UK progressing and evolving?
Jason Kemp, Data Select director of marketing: Acquisition, retention and development is the mantra of most mobile network operators (MNOs) in the UK. These three cogs keep turning, though the mechanics are changing: subsidy has all but disappeared from prepay; SIM-only is an increasingly attractive option for both MNOs and consumers; 24-month contract is the norm. Terms like ‘Net Promoter Score’, ‘Customer Lifetime Value’ and ‘Net Acquisition Cost’ are regular agenda points and shareholders globally are desperate to recover at least a few ounces of flesh. And in these times of austerity the customer is wiser and more cash conscious than ever.
The next six months will prove interesting. There are as ever KPIs to hit, and an ongoing need to streamline and demonstrate that a business is greater than the sum of its parts. There is also the dichotomy for (most of) the MNOs of being ‘home of the smartphone’ yet being not able to meet the data demands placed on them. And although UMTS 900 and some of the infrastructure sharing agreements will help short term, budgeting for and building 4G services won’t be cheap.
Lovrenc Kessler, Simon-Kucher & Partners director: The UK mobile market has been dominated by strong competition between the network carriers, leading to subsequently declining average revenues per user in 2011. The battle for higher migrations of prepaid customers to postpaid by attractive entry level plans fuelled ARPU losses and is likely to continue throughout 2012 if no countermeasures are taken.
While the network carriers have managed to monetise skyrocketing data consumption through re-establishing data caps, the challenge of monetisation of other usage types remains. The increasing popularity of social networks predominantly Facebook on smartphones as well as other over-the-top applications such as WhatsApp have led to a substantial decline in ‘traditional’ mobile products such as calls and texts.
Mobile network operators are challenged to respond to this trend by innovative tariff models, or by participating in new applications by developing attractive content on their own.
Since O2’s recent testing of LTE in London with selected customers the competition for the new 4G technology is off to a challenging start. The new network, offering more than three times faster downloads compared to the existing 3G standard, could be the last opportunity for MNOs to finally monetise a new technology and raise ARPUs again. It is high time MNOs started educating consumers that innovations, as in any other business, offer additional value and hence, justify a price premium.
Jim Michel, Brightstar Europe managing director: Mobile operators simply can’t afford to stand still for long or to be complacent in any way. It is a tough, competitive environment out there and the deals that they make, and the bets that they place, are going to dictate how well they do in 2012. That’s always been the case, of course, but the difference now is that the market has accelerated so much and with consumers feeling more financial pressure, the need to be competitive is greater than ever.
The networks need to look beyond that market dynamic and develop a more robust and stable business. They can do that by opening up the wider market and getting closer to the business-focused ICT reseller community, where there is a real desire for new income streams and sustainable business that will drive repeat revenues.
The time is right for mobile operators to use the services of distributors to increase access to multiple channels. This type of development is high on the agenda at Brightstar Tech Data. Networks need to start moving and being more expansive and progressive with their strategies; they are going to increase access to multiple channels and engage distributors that can drive business in all markets.
Alan Ranger, Cloudmark vice president, mobile marketing: With cyber criminals increasingly moving from less profitable phishing attacks via email to the rich environment that mobile provides, operators need to be aware of the potential security repercussions that the explosive growth in text messaging may bring. SMS text messaging attacks have the potential to cause far more damage than those in email.
Recent research by Cloudmark has revealed that financial fraud and spam via SMS texts is now growing at a rate of over 300% year over year in the US. Attack techniques are becoming increasingly sophisticated and can include any combination of rapidly changing content, phone numbers and MSISDN (a number uniquely identifying a mobile subscription). With more than half of SMS spam being composed of targeted attacks focused on extracting financial account information, this type of scam can usually have an immediate and detrimental impact on the mobile user.
Messaging security threats are becoming an increasing problem for European mobile operators as well, with 73% of mobile spam being premium rate fraud scams. The introduction of mobile banking and payments to the UK market may only serve to aggravate this problem and mobile operators will need to acknowledge this now in order to protect their subscribers. Like with any new service, consumers will only be happy to make use of them if they feel it is safe to do so. Operators will need to ensure that their security infrastructure is robust enough to meet the evolution in the market and protect against SMS-based threats. Consumers also need to be educated on how to identify banking-related scams and how to deal with them.
Andy Tow, Avenir Telecom managing director: The challenges for UK mobile operators will be to retain, and provide the best service to, their customers. This is always important but becomes even more so when new technologies launch.
Line rentals are reducing and data bundles are becoming an important factor as smartphone market share increases. Gone are the days when networks suddenly found a whole host of consumers and businesses that needed a mobile phone for the first time. However, the market is only saturated with handsets, not smartphones, so this is where the future lies.
By focussing on smartphone growth, operators must continue to concentrate on providing the best quality coverage throughout the UK and so the early adoption of 4G will be crucial. However, this in itself brings challenges as the move to 4G is focussed more on the web and so the proportion of phone calls made over the web will increase, hence eating into operator’s margins yet again.
Luckily consumers are willing to take a higher monthly tariff to ensure they don’t have to pay an upfront fee for a device that offers them more than just calls. So it will be up to the operators to ensure that they offer as many other products and services which are easily accessible and manageable, to maintain ‘stickability’ of their customers. Tablets and the cloud will continue to grow alongside smartphones and with Apple launching their new iPad 3, alongside the BlackBerry Playbook, and threats that Nokia will launch a tablet too, this market is set to grow and grow.