Feature phone apps market to almost double to $1 billion

The mobile apps market for feature phones will almost double by 2016, hitting revenues of $1 billion, after being spurred on by the success of apps in the smartphone sector, according to Ovum.

In a new report*, the independent telecoms analyst claims that while the feature phone apps market has not taken off in the same way as its smartphone counterpart,  it is beginning to take strides forward.

It states that improvements which have made both developing and publishing feature phone apps easier, the larger size of the market and reduced competition mean that the sector has the potential to be more lucrative for some developers.

Nick Dillon, Ovum analyst and author of the report, commented: “While feature phone users vastly outnumber smartphone users, the apps market hasn’t taken off in the same way. This is largely because it has lacked the distribution channels to enable widespread adoption.

“However, inspired by the success of apps in the smartphone market, the options have improved drastically, with many larger handset manufacturers, operators and third parties now offering improved distribution programmes for feature phones.

“While addressing this market is not as easy as the smartphone market, it has the potential to be more lucrative for some developers. The larger size of the market combined with higher barriers to entry means that there is less competition than in the smartphone market.”

According to Ovum, the number of feature phones worldwide will reach 2.3 billion in 2016, when they will continue to dominate the market, with a 63 per cent share, compared to 37 per cent for smartphones.

The report finds that despite its age, JavaME software is the best option for developing feature phone apps, but Nokia web widgets and Opera Mini widgets also enable simple applications using web technologies. In addition, options for web development will be further improved by the introduction of HTML5-capable browsers, which Ovum anticipates will become widespread on feature phones in the next 12–18 months. 

–ENDS—

NOTES TO EDITORS

*Opportunities for Mobile Development in the Mass Market

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Lack of innovation in LTE pricing models, report finds

Operators that offer high-speed mobile broadband technology LTE are failing to deliver innovative pricing models, according to Ovum.

In a new report*, the independent telecoms analyst firm claims that there is a lack of new and innovative LTE (long term evolution) tariffs, which is a missed opportunity for operators given that LTE is a new service in the eyes of consumers.

Nicole McCormick, Ovum senior analyst and author of the report, commented: “We looked at the LTE pricing strategies of operators in Europe, Asia-Pacific, and theUS, and were disappointed with our findings.

“LTE provides operators with the opportunity to experiment with new and innovative pricing models, which allows them to find the best way of deriving revenues from the premium service. 

“However, most operators have not grasped this opportunity. Instead, LTE tariffs in the regions Ovum analysed are dominated by unlimited offerings and large data buckets, which can be problematic.”

According to the report, unlimited data plans for LTE can present significant problems for operators, especially if they are accompanied by a lenient fair usage policy.

McCormick commented: “Operators should not offer unlimited LTE tariffs without some sort of deterrent as they could have an impact on the quality of the service given LTE’s data-intensive nature. However, we note that some leading operators –Verizon Wireless,SKTelecom, NTT DoCoMo and LG U+ – have steered clear of unlimited LTE offerings despite offering such packages in the 3G arena.”

The report also found that charging high premiums for LTE is unsustainable in the long-term due to competitive pressures in the industry and increased migration to 4G services. McCormick added: “Operators will need to be careful not to alienate high-end customers that have paid a premium for a fast, high-quality service by reducing LTE tariffs too quickly or drastically.”

–ENDS–

NOTES TO EDITORS

*LTE Tariff Comparison: Europe, Asia-Pacific, and the US

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Ovum finds significant operational hurdles for telco cloud services

While telcos are well-placed to take advantage of the burgeoning cloud computing market, they face considerable challenges when it comes to supporting and selling cloud services, according to Ovum.

In a new report*, the independent telecoms analyst claims that the operational hurdles telcos face to make a success of cloud services are ‘significant’.

Mark Giles, Ovum analyst and author of the report, commented:  “Much has been made of the potential for telcos to leverage existing assets, such as their communications networks, data centres, OSS and BSS systems and existing customer relationships, to offer cloud services to enterprises. However, while telcos’ assets do provide them with some key advantages over other cloud providers, there are a number of significant challenges that they face.

“Aside from a perceived lack of brand identity in the supply of IT services, obstacles such as bringing internal network and IT teams together, enabling sales teams, and ensuring that OSS and BSS systems can deliver on cloud’s on-demand nature, must be overcome.

“The pace of innovation required for cloud services is very different from traditional network services and requires telcos to drastically reduce their time to market. While this is a challenge for the back office, it also raises questions as to how telcos price and monitor the profitability of these services.”

According to the report, telcos should follow the lead of players such as SFR and Telstra by seriously considering a joint branding, marketing and even sales partnership with an existing IT services player to maximize their potential impact in the market.

Giles continued: “In addition to helping them overcome their internal operational challenges, a partnership can help telcos to expand their number of sales channels and profit from an association with a premium IT services brand.”

–ENDS—

NOTES TO EDITORS

*Enabling Telco Cloud Services

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Despite industry hype, enterprises resist IPv6 push

Most enterprises are continuing to resist pressure from the internet and telecoms industries to migrate to IPv6 by ignoring their efforts to push to the new internet standard, according to Ovum.

The new internet protocol IPv6 is being marketed as essential to the future growth of the internet as it opens up a wealth of new address space for web portals and applications.

However, in a new report* the independent telecoms analyst claims that pressure from players such as telecoms and internet service providers is falling on deaf ears and enterprises see no need to start the transition to IPv6.

Mike Sapien, Ovum principal analyst and author of the report, commented: “The recent World IPv6 day is one example of industry players promoting the protocol as the ‘next generation internet’ and pressurising enterprises to prepare for the move. But our recent research suggests that they are failing to make an impression on enterprise customers, who don’t see any need to even think about it

“There may be a degree of ‘head in sand’ mentality among enterprises, but our research stands in glaring contrast to the industry’s efforts to promote IPv6 over the past several years. Furthermore our research suggests that many enterprise customers think they are already using IPv6, when they are not.”

Metrics carried out by industry players have revealed that IPv6 traffic counts for less than three per cent of all internet traffic today.

According to the report, one of the major reasons for enterprises’ lack of urgency is that there are still plenty of IPv4 addresses available, meanwhile issues such as a lack of return on investment and more pressing IT priorities are also playing a part. “Most enterprise customers assume that having plentiful IPv4 addresses alleviates any need to make the move; it is just not that simple,” commented Sapien.

The report finds that there are some triggers that will motivate enterprises to make the move. For instance, the growing number of new  consumer devices, such as smartphones, that will be assigned IPv6 addresses, and the new web applications that will be accessed by these devices. In addition, as Asia-Pacific leads the world in IPv6 adoption, enterprises (and their many suppliers) doing business within this region will be influenced to follow suit.

In the meantime, it advises that education and planning are the key. Sapien concluded: “Internet application and service providers should continue to focus on customer education so that enterprise and consumer customers increase their awareness of the transition to IPv6. They should explain what the transition entails for the customer’s computers, network equipment, routers, servers and web infrastructure so that they are clear about what is involved. Every enterprise needs a plan before they hit the IPv6 wall unexpectedly.”

–ENDS—

NOTES TO EDITORS

*IPv6 Transition – What’s the Rush?

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.   

China to continue to dominate global FTTx market

China’s dominance of the global optical fiber broadband market will continue throughout 2011 and beyond, due to the huge predicted growth in subscribers in the country and the strength of its vendors, according to Ovum.

In a new report*, the independent telecoms analyst predicts that China’s FTTx subscribers will reach 100 million in 2016, which will represent more than 50 per cent of the world’s subscribers.

Meanwhile, the report states that Chinese FTTx vendors Huawei and ZTE, which were ranked the world’s number one and two, respectively, in 2010 by market share, will continue to hold their positions for years to come. The companies are a strong force both in the local Chinese market and overseas and their competitors will find it almost impossible to unseat them, the report finds.

Julie Kunstler, Ovum principal analyst and co-author of the report, commented: “China is the biggest consumer of FTTx equipment right now and that is set to continue. A key driver of the enormous forecasted growth is the bandwidth and subscriber targets set by the Chinese government and service providers. In addition, the government is providing support for deployments in the form of credit and partnerships. Meanwhile, the significant greenfield construction projects that are under way in the country make the installation of FTTx networks easier.”

In terms of the Chinese vendor picture, the report finds that Huawei will continue to be ranked the world’s number one throughout 2011 and beyond and competitors will struggle to steal market share from it. It states that Huawei is the leading FTTx PON vendor today in China and Europe, the Middle East, and Africa (EMEA) and the company will benefit from future growth in China and Eastern Europe.

Ms Kunstler continued: “Chinese FTTx vendors Huawei, ZTE, and FiberHome make up three of the top five global vendors and are ranked first, second, and fourth, respectively. The rise of the Chinese suppliers is mainly due to lower growth rates in Japan and Korea, where high FTTx household penetration rates have been reached. In addition, Japanese and Korean vendors are not major exporters of FTTx equipment.

“Huawei and ZTE are strong exporters outside of China. In the fourth quarter of 2010, 50 per cent of FTTx equipment revenues in EMEA corresponded to shipments by these two vendors. They have strong expertise in FTTx, given their large home market, and they will continue to be a formidable force around the globe.

“There will continue to be room for other players, but it will be difficult to unseat the top two.”

–ENDS—

NOTES TO EDITORS

*FTTx Market Review: China’s Dominance

The report is part of Ovum’s Signature Research portfolio for 2011, which represents the best of what Ovum analysts produce for each of the practices.

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.   

Global optical networking market to reach revenues of $20 billion in 2016

• North American market to grow by 12% this year
• Europe, the Middle East, and Africa to return to growth
• Asia-Pacific to contract again in 2011

The global optical networking (ON) market will reach revenues of $20 billion by 2016, as the sector pulls itself out of the economic downturn, predicts Ovum in a new forecast*.

However, the independent telecoms analyst warns that although the global market will grow at a compound annual growth rate (CAGR) of six per cent from 2010 to 2016, not all of the regions will see strong growth.

Ian Redpath, Ovum analyst and author of the forecast, commented: “Increasing bandwidth from residential broadband networks, mobile networks, and enterprises is the key driver of the growth. Carriers are investing in access networks and mobile long term evolution (LTE) rollouts are beginning to gain momentum. The ON market is also reaching a watershed moment in terms of technology. Networks based on 40G and 100G wavelengths are now poised for mass-market deployment.”

“However, while our forecast report shows a marked improvement for the market when compared to the recessionary period, it falls short of a strong bounce back. We expect yet another year of muddling out, with North America continuing to gain momentum; Europe, the Middle East, and Africa (EMEA) improving from contraction to modest growth; and Asia-Pacific beginning a modest retreat.”

Ovum predicts solid growth for North America in 2011 of 12 per cent, up from 7 per cent in 2010. Redpath commented: “Emerging technologies will be the driving force in North America. We expect adoption of 100G network building to gain momentum from both carriers and non-carriers.”

In EMEA, which contracted by 10 per cent in 2010, Ovum predicts that 2011 will be a turnaround year, with three per cent growth and a CAGR of 5.5 per cent from 2010 to 2016. Redpath commented: “Developing economies in EMEA still need basic infrastructure and the developed ones are due for a network refresh after two long years of recession-induced restraint.”

Ovum’s figures show that the market in Asia-Pacific contracted by 2.2 per cent last year and will contract by a further 3.2 per cent in 2011, although the reasons differ. Redpath added: “The 2010 reduction was due to a dry market in Japan and a government-induced freeze in India, while the Chinese market grew. For 2011, we predict growth again from Japan and India but a slowdown in China, caused by an overheated market that needs a little cooling-down period.”

–ENDS—

NOTES TO EDITORS

*ON Forecast Report: 2011-16

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is part of the Informa Group.

Rapid growth in use of social media for customer service by Chinese consumers

The use of social media for customer service by Chinese consumers has almost doubled in the last two years, as more and more turn to it as a viable alternative to the phone, research from Ovum has revealed.

According to a survey* by the independent telecoms analyst, 30 per cent of Chinese consumers get in touch with customer service via social media to find an answer to their queries, up from just 17 per cent two years ago.

In addition, the number of Chinese consumers seeking advice from customer service representatives via web chat and web self-service channels has increased significantly.

Two years ago less than 20 per cent of consumers used web chat or web self-service to find information, whereas today more than 60 per cent are using these channels. In fact, web chat and web self-service are the second most widely used channels today among Chinese consumers, with the most popular option being a direct call with a customer service representative.

Aphrodite Brinsmead, Ovum analyst and author of a new report** unveiling the research findings, commented: “We expect the use of social media for customer service will quickly catch up with web chat and web self-service channels. The number of Chinese consumers using social media for customer service today is already significantly higher than in the UK and US.

“In emerging contact center markets such as China, consumers are keen to experiment with new forms of media. Contact centers must evolve with their customers, providing information via the web and responding to social queries on forums to ensure that customers receive accurate product and service information.”

Ovum’s survey found that the most popular uses of social media by Chinese consumers for customer service are discussion boards and forums. Out of those respondents using social media for customer service, more than 50 per cent said they had started a discussion about a company in a forum while almost 50 per cent said they had responded to someone’s question. Meanwhile almost 50 per cent have used social media as a channel to complain about bad service or a faulty product.

However, despite the high number of Chinese consumers using social media and a rapidly evolving web culture, Ovum’s survey revealed that respondents still view a telephone call with a customer service representative as the best method when it comes to resolving an issue on the first attempt.

Brinsmead concluded: “Contact centers need to improve information across social media, blogs and forums so that customers are able to find answers to questions faster and with reduced effort.”

–ENDS—

NOTES TO EDITORS

*Ovum conducted a survey of Chinese consumers from November 2010 to January 2011 to gauge their attitudes on changes in customer service, frustrations with contact centers, channel preferences and social media usage.

**Consumer Preferences in Customer Service: China

The report is part of Ovum’s signature research portfolio for 2011, which represents the premium content produced by Ovum analysts.

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Ovum survey reveals UK fears over location-based technology in customer service

More than half of UK consumers say they are not comfortable with businesses using location-based technology to pinpoint their whereabouts, even if it would improve their customer service, research from Ovum has revealed.

According to a survey* by the independent telecoms analyst, despite the current hype about location-based services (LBS) and how they can be harnessed by companies, consumers remain wary. Sixty-one per cent of the consumers Ovum spoke to had concerns about the use of location-based technology in customer service. 

Ian Jacobs, Ovum analyst and author of a new report unveiling the survey findings, commented: “Although many UK consumers use location-based services such as Foursquare in their daily personal lives, when brands use LBS it is seen in a very different light by consumers.

“Consumers to date have very little experience with location-based services in the context of customer service. So, it is not bad experiences, but rather pervasive concerns about privacy driving the mindsets of UK consumers who feel their location data may be misused by businesses. To create a sense of trust, businesses must become much more transparent on how the data will be put to use, and show customers some demonstrable value when using LBS for customer care.”

Ovum’s survey showed that just one fifth of UK consumers are comfortable to share their location with companies using location-based services.

Ovum’s survey also revealed that the use of social media for customer service has not taken off with UK consumers, with just 12 per cent saying they had used it for this purpose.

Meanwhile, 73 per cent said they were doubtful that they would use social media sites in the future for customer support activities. 

      –ENDS—

NOTES TO EDITORS

*Ovum conducted a survey of UK consumers from November 2010 to January 2011 to gauge their attitudes on changes in customer service, frustrations with contact centres, channel preferences and social media usage.

**Consumer Preferences in Customer Service: United Kingdom

The report is part of Ovum’s signature research portfolio for 2011, which represents the premium content produced by Ovum analysts.

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

Red-hot growth in the switching and routing market cools in first quarter of 2011

The red-hot growth that the service provider switching and routing market has experienced over the last year cooled in the first quarter of 2011, according to Ovum.

In a new market analysis*, the independent telecoms analyst states that although global spending grew by nine per cent compared to the first quarter of 2010, this was the least positive result in more than a year.

Nonetheless Ovum’s research shows that Alcatel-Lucent, Huawei, Juniper and ZTE all posted double-digit revenue gains compared with the first quarter of 2010. However, market leader Cisco and Tellabs both posted declines.

Market leader Cisco’s revenues of $1.25 billion for the first quarter of 2011 were down six per cent compared to the first quarter of 2010 and down 12 per cent compared to the fourth quarter of 2010. This led to the company losing the most annualised market share.

Second-ranked Juniper enjoyed the biggest gain in sales versus the first quarter of 2010, increasing its revenues by a massive 28 per cent. This meant it also had the largest share gain for the annualised period ending in the first quarter of 2011.

Dana Cooperson, Ovum network infrastructure practice leader and author of the market report, commented: “While the market still experienced healthy growth, it was more modest than we have seen in previous quarters and an indication that this red-hot growth is cooling.

“All the global regions grew compared with the first quarter of 2010. In Europe, the Middle East and Africa and in South and Central America the growth was particularly strong, more than the nine per cent global average. However, growth in North America and Asia-Pacific fell short of this average.

“In terms of vendor strategy, mobility, the cloud, and the mobile cloud continue to be a focus of attention for vendors and are causing them to hone their value propositions. Meanwhile network operators are taking a more holistic approach when it comes to their needs.”

–ENDS—

NOTES TO EDITORS

 *Market Alert: 1Q11 SP Switching and Routing

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.  

Optical networking market continues to bounce back with 7% growth

The global optical networking (ON) market is continuing to bounce back and reached revenues of $3.5bn in the first quarter of 2011, up seven per cent on the same period in 2010, according to Ovum.

In a new market analysis*, the independent telecoms analyst states that Alcatel-Lucent was the top-performing vendor in the first quarter of 2011 and hit revenues of $645m. This was an increase of 17 per cent compared to quarter one 2010 and saw it achieve a market share of 18.4 per cent. It was the first quarter in two years that Alcatel-Lucent has posted number-one market revenues.

Importantly, Ovum found that annualised spending in the optical networking market appears to have crawled out of the red and into the black in the first quarter of 2011, albeit barely, with growth of one per cent to reach more than $14.6bn. Annualised share figures tend to give the best indicator of longer-term market trends.

Dana Cooperson, Ovum network infrastructure practice leader and author of the market report, commented: “The optical networking market continued to improve as we turned the page on a new year. Although spending was seasonally down on the previous quarter, the growth compared to the same quarter last year is very encouraging.

“Even more important is the small increase in annualised spending, which has been driven by strong growth in dense wavelength division multiplexing market and a shift to optical products more fully optimised for continued strong growth in IP-based traffic.

“The market growth has also been propelled by the Americas and annualised spending has continued to improve sequentially and year-on-year in both North America and South and Central America.

“In contrast, in Asia-Pacific and Europe, Middle East and Africa spending continued to stagnate when compared to the same period last year. Asia-Pacific trends were particularly bleak in the first quarter of 2011.”

Of the top 10 vendors, Ciena posted the most gain in annualised share, over the period from the second quarter of 2010 to the first quarter of 2011, while Huawei lost the most.

Other vendors that improved their annualised share position, in decreasing order of gains, were Ericsson, Fujitsu, Alcatel-Lucent, Cisco, and NEC. Rounding out the top 10, Tellabs and NSN lost share and ZTE neither gained nor lost.

–ENDS—

NOTES TO EDITORS

*Market Share Alert: 1Q11 Global ON

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.  

Business use of ‘big-screen’ mobile broadband to triple

The number of connections for ‘big-screen’ mobile Internet devices used for business will almost triple over the next five years as the worldwide workforce becomes increasingly mobile, predicts Ovum.

According to a new forecast* by the independent telecoms analyst, globally the number of big-screen broadband connections for devices such as laptops and tablets on enterprise contracts will hit 74 million by 2015 – up from 25.8 million in 2010 and a compound annual growth (CAGR) rate of 24 per cent.

Use of mobile handsets will continue to dominate the enterprise market with connections on enterprise contracts predicted to hit 233 million by 2015 – a CAGR of six per cent from 2010 to 2015. Underlying this trend is a major shift to the use of smartphones in businesses.

Meanwhile, total global revenues for the enterprise mobile market will reach $146 billion in 2015, with the majority of growth globally coming from the use of data services as mobile voice prices commoditise.

Pauline Trotter, Ovum principal analyst, commented: “An increasingly mobile workforce and the intensifying need for them to be able to access data wherever they are is driving the strong predicted growth in the number of enterprise broadband connections. However, we see that many enterprises find mobility increasingly difficult to manage, particularly as employees increasingly want to bring their own devices, including iPads, iPhones and Android devices, into the workplace and connect these to the company network. This puts pressure on IT departments who have to manage the associated risk as well as additional costs to the enterprise.”

 –ENDS—

NOTES TO EDITORS

*Enterprise Mobile Connections & Revenue Forecast: 2010–15

Figures for Europe and the US are available upon request

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

 ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Telecoms service market grows by 4% to hit $1.85 trillion

Telecoms service provider revenues grew by four per cent in 2010 to reach $1.85 trillion, driven by strong growth in the mobile market in the BRIC (Brazil, Russia, India and China) economies, according to new figures from Ovum.

The independent telecoms analyst looked closely at the 2010 financial performance of telecoms carriers across the globe for a new report*, with reassuring results. The four per cent growth represents a notable improvement from 2009, when revenues fell by four per cent.

Meanwhile average profitability showed positive signs, as measured by metrics such as operating cash flow and net profit margins, EBITDA (earnings before interest, taxes depreciation and amortisation) and net debt.

Matt Walker, Ovum principal analyst and author of the report, commented: “It’s too early to break out the champagne just yet, but within the context of a slowly improving global economy, the telecoms sector is returning to sustainable growth.”

In terms of the opportunity for vendors, although service provider capex declined by three per cent in 2010, this was an improvement from the nine per cent capex decline in 2009. Significantly, in the fourth quarter of 2010, carrier capex rose two per cent when compared to the fourth quarter of 2009.

This modest year-on-year (YoY) service provider capex increase was the first such growth since the fourth quarter of 2008 – the year the financial crisis hit – and is another sign that recovery in the telecoms sector is on track. The South and Central America region saw particularly good YoY capex growth of 13 per cent in the fourth quarter of 2010 and this region also has strong prospects for 2011.

Walker commented: “This late pick-up of capex in 2010 drove the full-year results. There is usually a fourth quarter budget flush, but 2010 was stronger than 2009, when most carriers remained jittery. Vendors who have faced several quarters of lean times are certainly happy to see the capex tap turned on again.”

Most of the big vendors enjoyed healthy top-line YoY growth for the fourth quarter of 2010. The best performing of the larger vendors included ZTE and Juniper, with 40 per cent and 26 per cent YoY revenue growth respectively. Alcatel-Lucent and Ericsson also did well with YoY growth of 13 per cent and 11 per cent respectively. Meanwhile, Nokia Siemens Networks’ (NSN) revenues in the fourth quarter of 2010 grew by 0.5 per cent to hit $5.4 billion, NSN’s first positive YoY revenue growth since the third quarter of 2008.

–ENDS—

NOTES TO EDITORS

*Telecom Finance: 4Q10/2010 Review of Vendor Results and Strategy

To arrange an interview please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

 Small-screen devices drive mobile broadband market to revenues of $223bn

• Global revenues to more than double by 2015
• Mobile broadband connections to hit three billion
• Small-screen devices (smartphones and feature phones) to make up 82% of connections by 2015
• Big-screen devices (laptops, netbooks and tablets) lag behind with 554 million connections by 2015

The global mobile broadband market will hit revenues of $223 billion in 2015, driven by continued strong demand for Internet access on small-screen devices such as smartphones, predicts Ovum.

However, the independent telecoms analyst finds that revenue growth is not keeping pace with connections, highlighting the need for service providers to develop improved monetisation strategies.

In a new forecast*, Ovum states that revenues from the global mobile broadband market will more than double from $100.5 billion in 2010 to $223 billion in 2015, growing at a compound annual growth rate (CAGR) of 17 per cent.

Meanwhile, total worldwide mobile broadband connections will grow at a CAGR of 28 per cent, reaching three billion in 2015 from 899 million in 2010. Of those three billion connections, 82 per cent will use small-screen devices such as smartphones and feature phones.

Big-screen mobile broadband connections (laptops, netbooks and tablets) will grow at a CAGR of 28 per cent from 2010 to 2015. However, this segment will only have 554 million connections by 2015.

In terms of revenues, small-screen devices will also lead the way, reaching $120 billion in 2015. However, there will be a smaller gap between big-screen mobile broadband revenues, which will be $102 billion. This reflects the premium that operators can charge for dedicated big-screen mobile broadband services as opposed to the bundles of minutes, messages and data seen in the small-screen segment.

Steven Hartley, Ovum principal analyst, commented: “The market for mobile broadband on small-screen devices is eating away at the opportunity for growth in the big-screen market. Consumers now expect to be able to access services such as Facebook on their mobile phone, which is why we will see handset connections far outstripping big-screen connections by 2015.

“The picture in emerging markets is also a key factor. Devices such as laptops are less affordable in these markets. However, low-end feature phones or smartphones are much more attainable, and many consumers will use these as their only form of Internet access, driving connections growth.

“Another key finding is that growth in the number of global connections will far outstrip revenues. From 2010 to 2015, connections will grow at a CAGR of 28 per cent, while revenues will increase by 17 per cent. Mobile broadband service providers will need to develop strategies that meet the demand for mobile Internet access while managing costs and securing customer loyalty.”

–ENDS—

NOTES TO EDITORS

*Mobile Broadband Connections and Revenues Forecast: 2010-15

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.

Telcos risk losing ground in emerging markets mobile data battle

Mobile operators in emerging markets need to make urgent adjustments to content strategies if they are to adapt to rapid shifts in the market, according to Ovum.

In a new report*, the independent telecoms analyst claims that while telcos are currently the dominant force in the emerging markets mobile content space, this is set to change due to strong competition from new platforms such as app stores. 

Angel Dobardziev, Ovum analyst and author of the report, said: “Unless telcos make rapid changes to their strategy and execution, their dominance is set to be challenged.

“We have found that once a consumer has bought a data access plan, they begin to move away from telco services. This is being heightened by the fact that many device and platform vendors are establishing alternative content distribution platforms that connect providers and end users easier, faster and cheaper than telcos. This will ultimately reduce the role of mobile operators to little more than providers of bandwidth.”

According to the report, while the emerging markets mobile data space will grow significantly in the next five years, it is still highly immature, with less than a fifth of mobile users currently venturing beyond SMS, ringtones and logos. Meanwhile, it claims that feature phones will be the key mobile content battleground in the short-term as smartphone use in emerging markets will continue to be limited until at least 2013.  

Dobardziev continued: “Telcos currently have mobile content strategies that are increasingly inadequate for addressing the new challenges and competition they now face. The key issue is one of strategic clarity on whether telcos plan to make money from bandwidth, mobile content or both. This issue goes to the core of the bit-pipe versus full service provider debate.”

The report states that focusing on mobile bandwidth and making a fair return on billing for content could be a profitable strategy for telcos, unattractive as the bit-pipe role may be. The other option is to develop a well-executed content strategy, which will require a significant change in mindset and considerable investment in IT, people and processes in order to facilitate a well-executed mobile content strategy.

Dobardziev concluded: “What is not an option for telcos is to carry on pursuing both access and content strategies but failing to do either effectively.”

–ENDS—

NOTES TO EDITORS

*Monetizing mobile content in emerging markets

The report is part of Ovum’s signature research portfolio for 2011, which represents the premium content produced by Ovum analysts.

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.   

IT must look beyond PUE to bring data centre costs under control

IT departments must build a business case for greater data centre efficiency measurement if they are to bring escalating costs under control, according to Ovum.

In a new report*, the independent technology analyst claims that most organisations do not adequately measure resource use in their data centres – or do not measure resource use at all – and consequently are unable to effectively tackle rising costs.

It states that IT decision-makers must build a business case and drive the message home to senior management to gain support for investment in a multi-faceted efficiency measurement strategy.

Rhonda Ascierto, Ovum senior analyst and author of the report, said: “Despite the fact that data centres are inefficient money pits, most organisations are not measuring inefficiencies or resource use.

“Disparate IT systems and a lack of information sharing among different site teams have fuelled the attitude that data efficiency measurement is too difficult and expensive to implement. This means a massive opportunity is being missed to reduce the vast resources that data centres swallow up.

“To overcome these challenges, IT decision-makers need to create a business case around data centre measurement in order to drive the message up to the very top of the business.”

According to the report, using the Power Usage Effectiveness (PUE) metric alone is not an adequate measurement strategy and will not lead to significant cost savings and resource efficiencies.

Instead, organisations should be implementing PUE in addition to several new metrics released by The Green Grid, the industry-led not-for-profit organisation that created PUE. These include Water Usage Effectiveness (WUE), Carbon Usage Effectiveness (CUE) and several data productivity proxies, as well as the new Data Centre Maturity Model, a blueprint for efficiency and sustainability measurement for data centers.

Ms Ascierto continued: “PUE only measures the efficiency of a facility’s infrastructure, such as air conditioning and lighting. Judging a data centre on PUE alone is akin to judging a company’s performance solely on earnings per share. The ways in which data centres consume resources are complex and multi-dimensional, and multiple metrics are needed to properly gauge their efficiency.”

– ENDS –

NOTES TO EDITORS

* From Money Pit to Profitability: The Business Case for Data Center Efficiency Metrics

To arrange an interview or for further details regarding this release, please contact Kelly Livesey in the Ovum press office on +44 161 238 4081, or email kelly.livesey@ovum.com.

 ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa group.

Dramatic growth in the optical components market in 2010

The global optical components (OC) market grew by 35 percent in 2010 to hit revenues of $5.6 billion, the highest in ten years, according to new research from Ovum.

In a new report*, the independent telecoms analyst states that the OC market led the telecom market recovery from the global recession of 2009 with its dramatic gain in 2010. However, Ovum believes the market will experience slower growth this year.

Daryl Inniss, Ovum analyst and author of the report*, commented: “The 35 percent year-on-year growth experienced by the OC market in 2010 was the highest since the telecom bubble years, when the market more than doubled in one year. However, we do not believe the market is experiencing another bubble.

“We predict that growth in the OC market is the best indicator for the next wave of telecom infrastructure expansion, as the 2010 increase follows the industry-wide contraction of 2009. What we expect is that the OC market will continue to expand in 2011, but at a slower rate.”

The OC market grew by five per cent sequentially in the last quarter of 2010, for the seventh consecutive quarterly gain. By segment, this growth was led by ROADMs and filters, long-distance transmission devices, and transmission discretes. ROADMs and filters was the fastest-growing OC segment: it grew 46 per cent in 2010 compared to 2009 and posted annual revenues of $0.9 billion, and its fourth quarter 2010 revenues of $260 million represented a 10 per cent sequential increase, way above the industry average of five per cent. Ovum believes the future outlook for this segment is good, as ROADMs are at the heart of all transport networks.

Inniss added: “There were many strong vendor performances in the fourth quarter of 2010. JDSU led the pack in terms of growth and increased its revenues by over 75 percent compared to the previous year and 17 percent sequentially. The company also grew its market share by 0.6 percent on the previous quarter.”

–ENDS—

NOTES TO EDITORS

*Market Alert: 4Q10 and 2010 Global OC and Market Share: 4Q10 OC Global Spreadsheet

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

 ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support.  

 Android to drive doubling of smartphone market by 2016

• Global shipments to hit 653 million by 2016
• Android will take 38% market share compared to Apple’s 17.5%
• Nokia–Microsoft deal re-draws the smartphone landscape

The global smartphone market will double in size by 2016 to hit shipments of 653 million, predicts Ovum in a new forecast*. Android will drive the growth and will emerge as the dominant platform, dramatically outperforming Apple with a massive 20.5 per cent lead on market share, finds the independent telecoms analyst.

Ovum predicts that smartphones will grow at a compound annual growth rate of 14.5 per cent between 2010 and 2016 and will account for approximately 40 per cent of the mobile phone market. Asia-Pacific will be the largest region, shipping just over 200 million units by 2016. Western Europe and North America will remain strong markets with 175 million and 165 million shipments respectively.

Ovum principal analyst Adam Leach said: “The smartphone market will see significant growth over the next five years, once again outperforming the wider mobile phone market. We will see dramatic shifts in dominance for smartphone software platforms, with Android storming into the lead with 38 per cent market share, compared to Apple iOS’ 17.5 per cent, by 2016.

“The success of the Android platform is being driven by the sheer number of hardware vendors supporting it at both the high and low ends of the market.”

According to Ovum’s forecast, just behind Apple iOS will be Windows Phone, with 17.2 per cent market share by 2016, followed by BlackBerry OS, with 16.5 per cent.

Leach continued:  “We expect at least one other platform to achieve mainstream success within the forecast period. This could be an existing player in the market such as Bada, WebOS, or MeeGo, or it could be a new entrant to the market place.”

According to Leach, the partnership between Nokia and Microsoft has redrawn the smartphone market and will result in a significant reduction in shipments of Symbian-based handsets as Nokia transitions to Windows Phone as its primary smartphone platform. However, Nokia still expects to ship 150 million Symbian-based handsets so there will be shipments beyond 2012 and in some regions into 2016.

Leach continued: “For Microsoft the deal provides a committed handset partner that has the potential to make Windows Phone a mainstream smartphone platform. The risk to Microsoft is that other handset makers may choose not to compete with Nokia and may turn their backs on Windows Phone.”

–ENDS—

NOTES TO EDITORS

*Smartphone Forecast: 2011–16

To arrange an interview or for further details regarding this release please contact  Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email kelly.livesey@ovum.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support.

Mobile network operators need new approaches to make data profitable

Mobile network operators need to develop a smarter approach to managing their network and charging for data usage to allow them to drive profits, manage costs and secure customer loyalty, according to Ovum.

In a new report* the independent telecoms analyst finds that MNOs need to use customer data held in the business support system with network policy management and control, if they are to manage soaring traffic loads, drive profits, personalise the customer experience and increase their agility and response times.

Clare McCarthy, Ovum principal analyst and author of the report, said: “The phenomenal growth in 3G-enabled devices and smartphones has seen mobile broadband data volumes soar, and penetration is only set to increase. This is putting intense pressure on limited network capacity and spectrum, and profits are not keeping pace with traffic volumes.

“By expanding policy management and controls, operators can develop smarter charging plans that will provide them with a sustainable revenue stream, improved customer service and the ability to shape traffic on their mobile broadband networks.”

According to forecasts by Ovum, mobile broadband users are set to grow at a compound annual growth rate of 28 per cent over five years to 2015. 3G dongles and smartphones will drive demand for broadband data applications, while smartphone and tablet users will increasingly use their devices for video services.

McCarthy continued: “Some MNOs have already adopted plans with options such as discounted evening and weekend use or monthly data caps. However, this approach doesn’t go far enough and only addresses one part of the equation. It doesn’t maximise revenue potential with high-value customers.

“Segmented data plans are one way of increasing revenues, and they can also help deliver a better customer experience. For example, an enterprise is more likely than a family to pay for guaranteed bandwidth, priority service availability and predefined access controls.

“MNOs can also encourage spend in the consumer sector by promoting ‘bite size’ access to specific applications, which can work well in emerging markets. If an MNO offers access to social networking services during a defined period at a lower cost, it can make its service more affordable and attractive to users, move traffic to off-peak periods and increase quality of service and customer experience across its operation.”

 -ENDS—

NOTES TO EDITORS

*Making a Profit from Mobile Broadband Data

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.

Mobile operators should fear the threat from Facebook

Facebook is shaping up to be a strong competitor to mobile operators that are in danger of underestimating the threat it poses, according to Ovum.

In a new report* the independent telecoms analyst states that Facebook is much more than a social network – this is just a starting point and its domain spreads much wider. However operators are being slow to wake up to the extent of Facebook’s ambitions and tend to view it as benign, non-competitive presence that they are keen to form partnerships with.

Eden Zoller, author of the report and Ovum principal analyst, said: “Facebook is encroaching directly on mobile operator territory and should not be underestimated.

“It has come a very long way since it first launched Facebook Mobile in 2006. It is now a force to be reckoned with in mobile with over 200 million users interacting with the service via mobile phone. It is much more than a social network and is better viewed as an increasingly rich platform for communications and content. Facebook wants to integrate with everything and be the main way that people consume and share information, anywhere and on any device.”

Facebook has made several moves that have placed it in competition with mobile operators. It has an integration deal with Skype for voice communications and in November 2010 unveiled an email offering. Meanwhile, it is turning increasing attention to location-based services with its Places platform and is pushing into mobile advertising in the shape of the Facebook Deals ‘check-in’ service. Facebook apps dominate app stores across most smartphone operating systems.

Zoller continued: “There is also intense ongoing speculation that Facebook will come out with its own phone, which in some respects would be the final piece of the puzzle. However, we don’t think that Facebook is any rush to launch its own hardware just yet, although it could be interested in working with partners on a customised device platform. This would in effect make Facebook a social operating system.”

Despite this competition from Facebook, mobile operators are keen to partner with it, for example by offering easy access to its services and address book integration.

Zoller added: “While there are good reasons why operators should wish to partner with Facebook, they should be more alert to the fact that it is shaping up to be a strong competitor. It is only by understanding Facebook fully that operators can engage with it effectively, be that on a collaborative or competitive basis.”

-ENDS—

NOTES TO EDITORS

*Mobile Social Networking: change driver & key players

The report is part of Ovum’s signature research portfolio for 2011, which represents the best of what analysts produce for each of the practices.

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.  

New generation of TV services begin to close gap on cable

Cable will retain dominance in the global multi-channel TV market over the next five years but the threat from the new generation of digital and internet protocol (IP) services will take its toll, predicts Ovum.

Globally cable TV will reach 573 million households by 2015, but will grow by an average of only three per cent per year for that period. The strongest growth will come from internet protocol TV (IPTV) with a compound annual growth rate (CAGR) of 24 per cent over the next five years to reach 109 million households.

Meanwhile digital terrestrial TV (DTT) (which includes services such as Freeview in the UK), will grow by an average of 18 per cent annually to reach 211 million households by 2015.

Jonathan Doran, Ovum analyst and author of the report, commented: “DTT growth will be fuelled primarily by the further allocation of spectrum for free-to-air services and the implementation of analog switchover deadlines, while telcos will continue to aggressively market their IPTV offerings as they play catch-up with the longer-established cable and satellite pay-TV platforms. Satellite pay-TV will remain stable in the face of competition from emerging low-cost services as it continues to attract a core of higher-value subscribers than cable.” 

Satellite TV will experience healthy average annual growth of ten per cent over the next five years to reach 419 million households worldwide. In the UK, satellite will retain its dominance reaching 13.7 million households by 2015, compared to just 3.9 million for cable. In second place is digital terrestrial, which will reach 11 million UK households in 2015, up only slightly from 10.3 million in 2010. Telco-delivered IPTV services will remain relatively insignificant in the UK market, reaching only 1.3 million UK households by 2015. However this is more than double the 2010 figure of 610,000, showing relatively strong growth.

In the US cable will retain its dominance but the number of households subscribed will drop from 60 million in 2010 to 54 million in 2015 as IPTV and internet-based alternatives continue to steal market share. Doran commented: “This is the continuation of a decline that’s already begun as households subscribing to cable dropped by four million between 2007 and 2010.

“This trend towards cancelling subscriptions, or ‘cord cutting’ has arisen due to a combination of the economic downturn and the growing availability of attractive low-cost or free digital terrestrial and internet-based options. It’s not just cord-cutting however, some cable customers will also defect to more innovative and better value IPTV and satellite pay-TV options.”

Ovum expects global pay-TV revenues to grow by nearly 40 per cent by 2015, but this figure masks significant variations between markets as well as platforms.

–ENDS–

NOTES TO EDITORS

*Multichannel TV Households and Revenue Forecast: 2010 – 15

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.  

1.4 billion people to access both fixed and mobile broadband by 2015

By 2015, 1.4 billion people globally will access both fixed-line and mobile broadband as usage grows rapidly and services converge, according to Ovum.

In two new reports* the independent telecoms analyst unveils research conducted on the future of the broadband market, which shows that in 2015 approximately 3.6 billion people will be able to access broadband services, 50 per cent of the world’s population.

Michael Philpot, Ovum analyst and co-author of the reports, commented: “Broadband access is now as important as other essential utilities such as gas, water and electricity. In the developed world it has become a basic requirement and penetration is above 60 per cent of households in many markets.”

In 2015, the majority of users (1.4 billion) will access both fixed-line and mobile services, showing a trend towards convergence of services. These ‘dual access subscribers’ will mainly be in the developed markets of North America, Western Europe and Asia Pacific, where 84 per cent will have dual access.

Charlie Davies, Ovum analyst and report co-author, said: “This convergence of services will see operators growing the revenues they generate from users by offering service bundles.

“However dual access use will not only happen in the developed word. Rapidly growing urban areas in the emerging markets where there is a larger proportion of high-value customers will also see growth in this area. “

Mobile broadband will continue to grow rapidly and by 2015 one billion people will use it as their only form of internet access, which is 28 per cent of all users globally or 13 per cent of the world’s population. This will mainly be driven by emerging markets in Eastern Europe (where 38 per cent of broadband users will be mobile only in 2015), South and Central America (35 per cent) and Asia Pacific (34 per cent).

Steven Hartley, Ovum principal analyst and report co-author, commented: “The primary reason for the strength of the mobile broadband market in the emerging markets is a lack of fixed-line infrastructure. However the areas that see the greatest penetration are those where there are affordable devices and sufficiently capable mobile networks. For this reason the strongest markets for mobile broadband will be Eastern Europe, where 38 per cent of broadband users will be mobile only in 2015, South and Central America with 35 per cent, and Asia Pacific with 34 per cent.”

–ENDS—

*The Future of broadband: Fixed-Mobile Convergence

The Future of Broadband: Fixed-Mobile Substitution

The reports are part of Ovum’s signature research portfolio for 2011, which represents the best of what analysts produce for each of the practices.

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

NOTES TO EDITORS

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.  

Wholesale telecoms carriers move up value chain with managed services

Wholesale telecoms carriers have a significant opportunity for growth by delivering managed services – moving beyond simply supplying bandwidth, finds Ovum.

In a new report* the independent telecoms analyst states that the market for outsourced managed services is still immature, however it is an area with much growth potential.

According to its findings, the move to delivering value-added services will ensure customer loyalty, improve margins and encourage longer-term contracts. It also enables intermediaries to benefit from wholesale carriers’ lower costs, greater efficiencies and expertise.

Paris Burstyn, Ovum senior analyst and author of the report, said: “There is a significant growth opportunity for wholesale carriers with the necessary network resources and skills to deliver managed services to network operators and other intermediaries. The market is only just starting to take shape but we expect carriers to quickly move beyond commodity bandwidth to providing value added services.

“The managed services provided by wholesale carriers are built from those that they provide for their own needs, for example security and data centers. Leveraging them to deliver integrated wholesale managed services to intermediaries represents a natural evolutionary step in developing new business.”

According to the report, there is significant demand for the services wholesale carriers can offer. ”We expect the world’s major telecoms players to support a growing range of managed wholesale services that build on their network infrastructure, connectivity and in-house skills to encompass a range of applications and bundled services,” Burstyn said.

Burstyn believes that it is not just service providers that are keen to tap into wholesale carriers’ many strengths in the managed services arena, but also Web 2.0 enterprises such as social networking sites, web applications and video-sharing sites. He said: “While Web 2.0 enterprises only represent a small portion of the current market, they can use wholesale carriers’ managed services to deliver applications, content and other products to their customers, allowing them to focus on their businesses while the wholesaler runs the foundation network.”

–ENDS—

NOTES TO EDITORS

*Outsourced and Managed Services: a Nascent International Wholesale Opportunity

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.

HSPA will retain dominance for next five years despite LTE hype

Despite the hype around LTE high-speed mobile broadband technology, HSPA will retain its dominance for at least the next five years, according to Ovum.

Forecasts from the independent telecoms analyst show that HSPA connections will hit 1.87 billion by 2015 and grow at a compound annual growth rate of 46 per cent.

Julien Grivolas, Ovum principal analyst and author of a new report*, said: “With LTE grabbing so much attention it is easy to ignore the fact that HSPA is a firmly established technology with a mature infrastructure and device ecosystem. Its other advantage is that is has a natural upgrade path in the form of the enhanced HSPA+, which is being deployed in ever-greater volumes in 2010 and will keep getting better and better. Indeed, HSPA+ and its future enhancements could be sufficient for many operators’ needs for the next five years.

“There is a huge amount of hype surrounding LTE and we expect it to really take off in 2012. However, HSPA will not go out of fashion and mobile operators are not about to turn their backs on it any time soon. The technology is continuing to evolve and operators will keep enhancing their networks for as long as it makes good economic sense.”

According to the report, LTE will become the dominant technology in the future, but HSPA will not disappear and many operators are in no rush to migrate. Grivolas said: “HSPA+ and its enhanced evolutions should not be viewed as competitors to LTE, but rather as complementary technologies.

“Ultimately, the availability of spectrum is certainly an issue that will have a strong bearing on the commercial success of LTE, as its availability is fundamental to service launches. With that in mind, it may pay for operators to hang back and let others invest in the development of the ecosystem and make mistakes first. “

–ENDS—

NOTES TO EDITORS

*Despite LTE, HSPA+ keeps evolving

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.

Tough opposition from mobile operators in termination rate battle

Ofcom faces tough opposition from mobile operators in the battle to reduce termination rates due to the negative impact on revenues, according to Ovum.

In a new report* the independent telecoms analyst states that Ofcom and other regulators will become embroiled in a ‘vigorously contested’ consultation with operators, as they seek to protect their bottom line.

The mobile termination rate (MTR) is the amount charged by one operator to another for terminating a call on their network. The rates for mobile are currently higher than fixed line charges and vary across different operators. However the European Commission wants standardisation across the continent and is putting pressure on regulators such as Ofcom to intervene. According to the report, this would result in MTRs falling by almost 90 per cent over the next five years, from an average of six euro cents to one.

Matthew Howett, an Ovum lead analyst and co-author of the report, said: “There is currently a revolution underway in Europe for how MTRs are calculated and we expect rates to fall considerably as a result. However, Ofcom’s intervention in the matter will be hotly contested by operators who will oppose a reduction in their rates due to the negative impact it will have on their revenues.

“Operators will definitely not accept any reduction in termination rates without a fight and Ofcom should be prepared for a fierce battle with operators, keen to protect their own interests. As a result, consumers may be waiting longer for the cheaper calls that lower termination rates could encourage.

“Currently the termination rate represents a price floor in terms of the retail price paid by consumers. Regulators will also be vigilant of operators increasing call prices for some consumers as a way to make up for lost revenues.”

Termination rates were reduced by 52 per cent on average between 2005 and 2010, with France leading the way with a cut of 76 per cent. In stark contrast, Ireland saw the smallest cut with a reduction of just 24 per cent.

Howett added: “According to the existing EU telecoms rules, Ofcom must take ‘utmost account’ of the EC’s recommendation and will have to bring termination rates down and ensure standardisation by 31 December 2012. However, given the opposition that mobile operators will put forward, this could be a tall order.”

-Ends-

NOTES TO EDITORS

*The status of mobile termination regulation in the EU15

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on 0161 238 4081, or email klivesey@datamonitor.com

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.

The data centre threat and opportunity for telecoms carriers

Telecoms carriers need to make major changes to their data centre strategies if they are to remain competitive in the face of strong offerings from independents, according to Ovum.

In a new report, the independent telecoms analyst states that carriers need to learn lessons from data centre independents, which are viewed by many businesses as more agile, innovative and receptive to new trends, including the fast-growing migration to cloud services.

Mike Sapien, ovum analyst and author of the new report*, believes that carriers need to up their game if they are to remain major players and become significant providers of cloud services.

He said: “Data centres have traditionally been used by carriers for basic hosting and collocation purposes. However their role has taken on a new importance with the advent of cloud-based services and virtualisation, and has changed to address this emerging demand.

“Independent data centre operators are winning business in this market and are building expertise. They represent a formidable challenge to carriers, who will need to up their game quickly, if they are to keep pace.”

According to Sapien, the independents are impressing businesses by showcasing the newest and best technology and systems, as well as introducing them to advanced data centre features and some of the highest quality facilities.

He said: “This has become one of the critical capital and investment challenges. Carriers need more focus in this area and are losing ground to independents as a result. However if they adapt some of the strategies of the independents to have global reach they can make it back and have a place with the major data centre and cloud service providers.”

Sapien believes carriers should also capitalise on existing customer relationships and channels, as this is where they have the advantage over independents. He added: “Carriers have many more strong relationships with large multi-nationals than the independents, who find this area a major challenge and disadvantage.

“In addition the government and education sectors are traditionally strong markets for large carriers and many organisations are now considering a move to hosted and cloud services. Carriers should take advantage of existing relationships, create new ecosystems and partnerships within their data centre portfolio and show clients that they can meet their needs.”

–ENDS—

NOTES TO EDITORS

*Independent data center trends: what they mean to global carriers

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 0161 238 4081, or email klivesey@datamonitor.com

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Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.