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Deloitte Analyses Top Trends in the Telecommunications Industry for 2009 |
Tirana, 20 January 2009- The Technology, Media and Telecommunications (TMT) practice at Deloitte announced its predictions today for the telecommunications sector for 2009. The telecommunications sector is unlikely to remain unscathed by the state of the global economy, but while global growth may be cyclical, the need for the world to stay in touch, and therefore the need of telecommunications, remains fundamental.
Dariusz Nachyla, head of TMT at Deloitte Central Europe, comments: “The telecommunications market will go through interesting changes in 2009, mostly caused by the global economic crisis but also as a result of the maturing of certain market trends that started years ago. This year’s predictions include an outlook for smart phones, the increasing impact of independent applications providers on the value-added services of mobile operators, and reflections on the speed at which termination rates are cut across Europe.”
The 2009 series of predictions has drawn on internal and external inputs from conversations with member firm clients, contributions from Deloitte member firms 6,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.
Smart Phones: How to Stay Clever in a Downturn
A continued economic downturn in 2009 may buffet the smart phone’s fortunes. In an effort to reduce costs, mobile operators, which are the main channel to market for smart phones, may start reviewing handset subsidies, which the industry invests tens of billions of dollars in each year. Mobile phone manufacturers need to show mobile operators how their smart phone could provide a superior return on investment compared with both their competitors and with other, cheaper types of phone. They should focus on developing and marketing smart phones whose features consumers are willing to pay for despite tough times.
The Joys of Disintermediation: Why Operators Should Embrace the Application Store
Mobile operators have long been concerned with disintermediation: the intrusion of third parties into the originally closed relationship between operator and customer. But in 2009, mobile phone users are expected to download over 10 billion applications to their mobile phones—the majority of which will be from sites managed by mobile device manufacturers, consumer electronics firms, and software houses. Although operators are unlikely to earn any direct revenue from third-party application downloads, there are several options for them to generate income from downloads, including device back up, the management of application transfers, and specialised services provided to third-party stores. Operators may be able to earn revenues from developers and consumers by wholesaling both presence and location-sensitivity into services. Consumers will benefit from application stores, but should be mindful of the seemingly inexorable risk that some applications may be contaminated by viruses.
Mobile Termination Rates in Europe: a Cut Too Far or a Cut Too Fast?
Mobile termination rates (MTR) in Europe have historically been higher than equivalent fixed charges. During 2008, the spread of MTRs in Europe was between €0.02 and €0.18 per minute. This compares to typical fixed termination charges of €0.01. In June 2008, however, the European Commission (EC) recommended that the asymmetry between mobile and fixed charges be reduced, proposing that MTRs fall by 70 percent over three years. Mobile operators likely to be adversely affected by MTR cuts should suggest alternative approaches to the EC proposals, but operators should avoid over-stating the impact of MTR cuts. Exaggerated claims may not help negotiations with regulators, and may even heighten concerns from investors. The fact remains, however, that MTR declines are likely to accelerate, and operators must gauge the impact on profitability, perhaps looking at data services to offset falling voice revenues. Likewise, mobile operators who stand to gain from MTR cuts should also consider the broader impact, which is that consumers are likely to expect lower bills from all operators.
For a copy of report with all the 2009 Deloitte predictions please email: almarketing@deloittece.com or visit the website Telecommunication Sector
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