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Major players revisit calls for regulatory change

Steven Hartley, Practice Leader, Service Provider and Markets

The CEOs of three of Europe's leading telcos launched MWC 2015 with the traditional call for regulatory change. They have a strong case, but what was most interesting was hearing how they view their futures. It is easy to be cynical about annual calls for regulatory change, and this year the arguments rather took away from the increasingly sensible view of the future articulated by the global operators.

The GSMA chairman and Telenor CEO, Jon Fredrik Baksaas, went first with a roundup of industry initiatives. As noble as these may be, they always seem to highlight how fragmented the industry really is; compare 16 operators working together in a digital identity scheme to talk of industry-wide disintermediation from Internet services and end users.

Next Tim Hoettges, CEO of Deutsche Telekom (DT), reinforced Ovum’s sense that DT understands how best to position in the new industry value chain. Hoettges emphasized the need for telcos to focus on connectivity and was the first to highlight the regulatory imbalance between telcos and Internet players. Although regulators have a case to answer when it comes to how regulatory issues apply to telcos and Internet players, this complaint did rather take away from his refreshingly pragmatic approach.

Finally, Vodafone CEO Vittorio Colao presented the user’s view of today's mobile world. He raised the same issues as his peers, saying that users want connectivity at an affordable rate and calling for regulatory change.

European players especially are increasingly frustrated by the slow rate of regulatory change. Meanwhile they are continuing to try to define the exact role they should play to best profit from the accelerating growth in connectivity.

Vodafone and Deutsche Telekom focus on native availability of RCS to stimulate user adoption

Pamela Clark-Dickson, Principal Analyst, Consumer

Paresh Modi, group head of business development at Vodafone Group Consumer Services, has suggested that there may still be hope for RCS. At MWC 2015 he told delegates that “thousands” of new users are being added daily to Vodafone’s RCS-based Message+ service, which is available in approximately 14 markets across the operator’s footprint.

In addition, in a pre-MWC briefing Thomas Welzel, DT’s senior proposition manager for voice and messaging and GSMA RCS chairman, told Ovum that the operator’s own RCS-based service is starting to see continuous and steep growth in unique active users, although take-up is still relatively low.

Both Modi and Welzel believe that native availability of RCS in devices is instrumental to the take-up of RCS-based services; Modi stated that approximately 50 devices have native RCS. Neither Vodafone nor DT is marketing its service as RCS. Instead, the operators are positioning the services as “better than SMS” and allowing users to discover the additional features that are included in their voice and messaging clients.

SK Telecom details ambitious IoT plans with new devices

Mark Newman, Chief Research Officer, Ovum Telecoms

Yesterday SK Telekom shared its 5G road map with a number of Ovum analysts and it is clear that the Internet of Things (IoT) sits at the center of its vision. The operator plans to build a macro 5G network, to which it will connect millions of devices that communicate over both licensed and unlicensed spectrum. At MWC 2015 it also launched its consumer-centric IoT devices, including a watch, a hearing aid, a pico projector, and a portable Wi-Fi speaker; together these devices comprise a bold move into the emerging IoT device market.

SK Telecom is one of the few operators with the courage – and the expertise and consumer branding – to launch its own IoT devices. Whatever the commercial success of the new devices, the operator will gain valuable experience of how it can play a role in IoT.

Industry players adopt their 5G positions as 2020 nears

Paul Lambert, Analyst, Service Providers and Markets

At MWC 2015 industry players are busy taking positions in earnest in their bid to play a central role in 5G systems, building on their success in defining and rolling out 4G networks. It seems likely that 2020 will be the year that 5G will make its entrance in the first global telecoms markets, with the usual suspects – Japan and South Korea – looking the most likely markets to see the first commercial launches. China will also make an early play to be among the 5G front-runners.

DoCoMo today announced a three-way 5G technical collaboration with China Mobile and KT Corporation to accelerate 5G commercial deployments and drive standardization efforts. The company aims to launch a 5G mobile communication service in Japan in time for the Tokyo 2020 Olympic and Paralympic Games.

Meanwhile, Ericsson and Telstra today said that they will collaborate on 5G standards and technologies. The collaboration activities will commence in 2Q15 and will continue to evolve as the standards mature and 5G becomes a commercial network reality, again around 2020.

Based on the success of 4G, the industry has every reason to be optimistic about the capabilities and monetization opportunities 5G will bring and it should be commended on putting into practice its learnings from defining and commercializing 4G systems. To ensure that the success of 4G is repeated, all players in the industry must focus on the larger picture of building affordable new technology that is not hampered by company-specific approaches or intellectual property claims.

Design and hardware features resurface as the main ways to differentiate flagship smartphones

Ronan de Renesse, Lead Analyst, Consumer Technology

In recent years, handset manufacturers have been focusing on software and services as the key ways to differentiate their devices. This remains a central aspect of the consumer experience, but product launches from Samsung, LG, and HTC at MWC 2015 have shown a refocus on design and specifications.

The Samsung Galaxy S6 Edge features a double-edged, curved quad HD super AMOLED display, in-house developed Exynos processor, and UFS internal memory. Samsung has also reduced the number of Android add-ons and simplified core native applications. LG brought the curviness of its G Flex range to its mid- and entry-level smartphone line-up (i.e., the LG Magna, LG Spirit, LG Leon, and LG Joy). HTC has retained its award winning design, adding a gold feeling to it with a new dual anodization process.

With the S6 and S6 Edge, Samsung is directly attempting to win back iPhone 6 and 6 Plus users – and looks likely to succeed. However, its sales will be affected by the fact that Apple captured most of the high-end market in 2014; Samsung may have to wait for those users to upgrade, hindering its 2015 prospects.

To some extent the lack of flagship device launches from Microsoft, Sony, and LG shows a more cautious approach from smartphone makers in a maturing high-end market, where any small mistake can turn into a very long nightmare.

Vendors search for the best approach to LTE in unlicensed spectrum

Daryl Schoolar, Principal Analyst, Intelligent Networks

Before the halfway point of the first day of MWC 2015 Alcatel-Lucent, Ericsson, Qualcomm, and SK Telecom had already spoken about using unlicensed spectrum in conjunction with LTE over licensed spectrum. Clearly this is a popular, as well as confusing, topic.

Since CES in January Ericsson has been talking about LTE Licensed Assisted Access (LTE-LAA). Here LTE is aggregated between both licensed spectrum and unlicensed 5GHz spectrum. Today Alcatel-Lucent provided a different approach, whereby the downlink remains Wi-Fi but LTE is used in the uplink. The vendor can see full carrier aggregation between Wi-Fi and LTE; it also supports LTE-LAA.

All of this can be confusing: service models are uncertain, as are decisions on which type of harmonization to use, and when. Hopefully Qualcomm can help here, because it supports both Ericsson and Alcatel-Lucent’s options. Most confusing of all, gaining regulatory approval to use unlicensed bands to support licensed bands is very questionable. SK Telecom – an LTE-LAA partner of Ericsson – said at an analyst event on Sunday that regulatory concerns give it cause to hesitate on full commitment to this technology.

Ericsson puts big data and analytics at the heart of telcos’ digital transformation

Adaora Okeleke, Analyst, Telecoms Operations and IT

Ericsson is demonstrating its latest product and service offerings at MWC 2015. These will include its new digital telco transformation offering and its upgraded analytics platform, Expert Analytics 15.0. Both launches have been developed to enhance its OSS/BSS portfolio.

Ericsson’s announcements highlight the crucial modifications that telcos must make to their operating models if they are to become agile and responsive to changes within the mobile industry. Processes and data are at the heart of these modifications.

Although telcos’ existing IT systems need to be transformed and centralized to ensure a singular view of the customer, data needs to support the business decisions that are taken. This will require not just descriptive and diagnostic analytic capabilities, but also the ability to leverage insights to make forecasts using predictive analytics.

Orange’s sub-$40 smartphone bundle is a well-crafted offer to stimulate MEA prepaid data use

Paul Lambert, Analyst, Service Providers and Markets

Orange today launched a well-crafted offer aimed at stimulating uptake of mobile data services in the Middle East and Africa (MEA): a sub-$40 3G device bundled with data and voice access. The Orange Klif is a prepaid offer that comes with a 3G Firefox OS smartphone exclusive to the operator. Depending on the market, a typical data bundle will be up to 500MB per month for six months, with the opportunity to top-up when reaching the end of the bundle.

Stimulating data usage among low-ARPU users is essential to the growth of operators in emerging markets. To date, the barriers have been both providing devices at the right price for such markets and offering tariffs that are well priced and that encourage high usage.

Klif is a well-thought-out offering that aligns low device prices with entry-level tariffs that will put mobile Internet connectivity within the reach of more users. This is a sound move that will stimulate data ARPU among Orange’s MEA user base. To capitalize on the opportunity, Orange will have to focus on evolving the pricing of the offer – in particular the amount of data users receive as part of their bundle – to ensure that it appeals to its target market.

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