The Role of 4G in Mobile Data Monetisation

Transcription

1 Presentation for Mobile Broadband SIG The Role of 4G in Mobile Data Monetisation 8 th May 2013 Ronan de Renesse, Principal Analyst

2 Smartphones take a large share of data revenues but has more value to offer to MBB Share of mobile data connections and revenues by device type UK, 2008 and % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Connections Data revenues Connections Data revenues Mobile broadband Smartphones 2

3 Tablets are driving a major shift in mobile broadband device mix New market data led us to reduce our MBB forecast significantly Key assumptions: Tethering replaces dongles Connected tablets replace laptops + dongle Competition from WiFi Attractive fixed broadband bundles Shift in spend and mobile data consumption, not an absolute decline Residential complementary connections are most exposed Mobile broadband forecast by device type, UK, Number of connections (million) Large-screen (LS) Mid-screen (MS)

4 4 Tablets could contribute more Tablet owners by device origin UK new tablets Tablet owners by device capabilities - UK 29% 22% 19% 45% 49% 36% Service provider (operator) 3rd party (retailer) Gift (family and friends) Wi-Fi only 3G - connected 3G - not connected Source: Connected Consumer Survey, 2013

5 33% of UK smartphone owners also have a tablet and a laptop Share of UK smarphone respondents Connectable device ownership for UK smartphone users 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Laptop PMP HH console Tablet ereader UK smartphone panel by tablet and laptop ownership 33% Tablet 6% 2% Tablet & Laptop 59% Laptop Neither 5 Source: Connected Consumer Survey 2013

6 Multi-device works in the US but can it be applied to Europe? AT&T and Verizon launched in 3Q million subscribers signed up for AT&T s plan first 2 weeks after launch. 90% of AT&T smartphones are on a shared plan, more than a quarter are on a 10GB per month plan. Verizon has changed its reporting to average revenue per account (ARPA), reporting an average of 2.64 device connections per account. AT&T reports an average of 3 devices per account. Price per gigabyte of selected mobile data plans, USA Data plan 1GB 6GB 10G B 20G B Price per gigabye (USD) AT&T Mobile share 85 ( per ( per 15 ( per 11.5 ( per Verizon Wireless Share Everything 90 ( per 20 ( per 14 ( per Offered, but not quoted 6

7 Europe responds better to tethering than multidevice tariffs Share of respondents using MBB services, mobile hotspots and tethering October 2012 Percentage of respondents 35% 30% 25% 20% 15% 10% 5% 0% Poland UK Spain LS only MS only LS & MS Tethering Personal hotspot USA France Germany 7 Source: Connected Consumer Survey 2013

8 Mobile data pricing strategies are capital to secure future mobile data monetisation paths 8 Truly unlimited Maximum available speed Monetisation path Higher-speed usage Unlimited (capped or throttled) Maximum available speed Monetisation path Reduced speeds More usage at maximum speed Openly advertised data allowance Limited usage at maximum speed Monetisation path No more usage until next billing period More usage at maximum or reduced speed

9 UK view: volume-based (EE) versus unlimited (3UK) SIM-only smartphone 12 & 1 month deals Monthly fee (GBP) Data allowance (GB per month) EE 3UK_600 3UK_200 3UK_2000 Total cost of ownership (GBP) iphone 5 32GB 24 months TCO 2,000 1,800 1,600 1,400 1,200 1, Data allowance (GB per month) EE 3UK_2000a 3UK_2000c 3UK_500 3UK_2000b 9

10 10 How long will 4G price premiums hold for? Allowance versus access charge for entry-level 4G LS MBB services Q4 2012

11 11 Market drivers and inhibitors for 4G adoption Service availability Network coverage Number of operators with Service/Network quality It s not just about speeds (e.g. Vo, VAS services) Cheaper mobile data charges 3G/4G tariff differentiation to disappear 2 years after launch, quicker for handsets Devices devices should be made available to customers as soon as possible Expensive mobile data charges High 4G price premium hinder overall adoption Lack of devices Not that many devices yet available on 800MHz and 2600MHz 4G devices too expensive The prepay market 46% of UK handset connections are on prepay tariffs Devices on long replacement rates Tablets have longer replacement rates than smartphones

12 4G UK forecast 47% of mobile connections will 4G active by the end of G UK forecasts by device type, % 12 4G connections (million) % 40% 35% 30% 25% 20% 15% 10% 5% 4G share of total connections (%) 4G M2M 4G MBB 4G handsets 4G% of total %

13 13 Thank you Ronan de Renesse Principal Analyst