Four Reasons for Service Providers to Smile in 2012
I originally intended to write this blog post about positive trends in 2012 much closer to January 1, but I was busy planning a big celebration. I’m of course referring to Amdocs’ upcoming 30th anniversary year (what did you think I meant?). Keep an eye on this space for more details …
And speaking of the future, here are four reasons from a born optimist for service providers to smile in 2012:
1. Innovation will flourish, in part due to operational efficiencies caused by the economic slowdown. This will be particularly felt in Europe and North America.
Finding reasons to smile ...
People often think of service provider innovation in terms of marketing, which is a key component, but economic slowdowns are also catalysts for the reinvention of operational models. BUYIN, the recently approved procurement joint venture between Deutsche Telekom and France Télécom Orange, is a great example of an innovative operational model. The targeted 1.3 billion Euros in combined savings could be a significant and much-needed change for both companies in terms of improving structural efficiencies.
Another example is Verizon Wireless acquiring a block of spectrum from Comcast, Time Warner Cable and Bright House Networks (another joint venture). They will access each other’s products, with the cable companies able to purchase wireless service wholesale from Verizon. Verizon, meanwhile, will be able to resell cable services. Service providers forgoing ownership of underlying networks and instead focusing on creating innovative and effective partnerships will make for a VERY interesting 2012.
2. More devices mean more bandwidth and more monetization opportunities – improving the position of service providers.
AT&T’s third quarter results show that roughly 75 percent of AT&T’s net adds on the network were for tablets and connected devices, such as automobile monitoring systems, security systems and other products emerging as new growth sources.
And Rogers, a Canadian service provider, is now offering “Smart Home Automation.” The move is apparently an attempt by Rogers to transition to new markets and generate additional revenue. The combination of Rogers’ cable and wireless networks will enable users to manage all sensors and cameras as part of a complete security system.
New devices that impact our day-to-day lives will emerge in 2012, and I believe a significant portion of these will be managed by service providers.
3. There will be more choice for consumers and therefore more non-traditional opportunities to create a unique customer experience.
Sky has rebranded Sky Mobile TV and Sky Player, its online platform, as “Sky Go.” This online platform enables subscribers to watch its channels on computers, mobile phones and tablet devices. The interesting part is the decision to also offer this service to non-Sky subscribers, which blurs the lines between Sky’s cable and media businesses and changes some of the fundamentals of these businesses.
Sky is expected to leverage public WiFi platforms to “supercharge” the customer experience even further. Coupling access with content will create some surprising new models. During a period where content is king and freedom of choice is a given, we can expect to see more service providers challenging the established rules of the game.
Another example is T-Mobile USA’s Bobsled voice application, which supports VoIP calling to telephone numbers for iOS and Android devices. This application is available on Google Android or Apple’s App Store for non-T-Mobile customers, too. If you can’t beat ‘em, join ‘em seems to be this carrier’s attitude towards OTT players such as Skype.
4. Service providers take unique customer experiences to their own channels.
A recent Telstra (Australia) campaign focused solely on the convenience of the ordering and set-up processes. “From today, you can now buy online and choose to collect your order from any Telstra Store of your choice… Plus, if you order a new mobile through this service, we will set up your phone for you on the spot.”
Another example is the release of AT&T’s new API platform, which will enrich apps with AT&T core assets and capabilities, such as voice, SMS, mobile health services and location-based services. In addition, developers will be able to allow users to make payments in apps that will appear on their AT&T bill. Those capabilities, along with the HTML 5 cross-device feature, allow AT&T to offer a unique experience on its own channel, across all devices.
Providers are trying to deliver a version of the Apple store experience. In 2012, service providers will attempt to leverage their robust distribution channels, call centers and other processes to deliver a unique experience. Process innovation can be expected from service providers who are eager to compete effectively with Apple.
Have a wonder 2012 everyone! I look forward to seeing what’s in store for us!
* Special thanks to Eric Danis for his editorial assistance.
Industry trends and what to expect in 2012 is very well captured indeed. Thanks for sharing!!
Good post. Really enjoy, as always.
- “More devices mean more bandwidth and more monetization opportunities”. This can be intrepreted as “more devices mean more bandwidth requirements and more managing lack of capacity (or, network upgrade, at the worst case). At this point I see no smile yet from the CSPs side.
They will need to be sure that, taking into account E2E investement, the ARPU shows a real growth. For now, with the lack of good methods to handle lack of capacity this is not a trivial task.
Some data from 4th QTR earnings reports and analyst comments… Smart phones are becoming the majority of activations now and CSP’s have to deliver the bandwidth customers will demand.
“Nielsen reports, sixty percent of consumers who purchased a new mobile device during the fourth quarter selected a smart phone over a feature phone.”
“AT&T said in early December it sold more than 6 million smart phones in the first two months of the fourth quarter and was selling new smartphones at a rate of 100,000 per day.”
“Google’s recent announcement that it activates more than 700,000 Android devices every day!
Regarding network capacity – we are seeing on the Ethernet side of the house that there are a lot of capcity (read fiber-optic) upgrades, and more are planned I am sure.
About smartphones – clearly people going to iPhones and Android devices end up paying more per-subscriber to Service providers. I believe profit margins on data are pretty big for them, so this should translate into real growth.
Still, I believe this year a lot of Service Providers will focus on 4G LTE rollout. Hopefully we as Amdocs can find a good way to help them with that.
Seem very promising..
Thanks for the update ..