Mobile broadband. Market trends. Mikael Halén Director, Government & Industry Relations. September 5, 2014, CAPE TOWN

Transcription

1 Mobile broadband Market trends September 5, 2014, CAPE TOWN Mikael Halén Director, Government & Industry Relations Capacity building workshop SA Parliament Cape Town September 5, 2014

2 The last 20 years we have started a change greater than the industrialization Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 2 Capacity building workshop SA Parliament Cape Town September 5, 2014

3 The starting point GSM Linus Torvalds Tim Berners Lee Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 3 Capacity building workshop SA Parliament Cape Town September 5, 2014

4 THINGS WE THINK By 2020, everything that benefits from a network connection will be connected. Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 4

5 Interaction infrastructure creating Social media Working Everywhere accessibility media Collaborate Works in a crowd Things communicating Mobility Communicate Latency reliability Interaction Infrastructure Many simple devices Transport Learning Wellness Education Accessibility, large crowds Super real-time Healthcare realize Reliable connections Transact Retail Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 5 Banking

6 Three industry forces Policy enablement Market conditions Technology developments Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 6

7 key Growth drivers ICT in Key Sectors Devices and Local Content High Performing Networks Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 7 Capacity building workshop SA Parliament Cape Town September 5, 2014 National Broadband Plans

8 The Networked Society comes with great promise for all Great opportunity to transform economies and improve the wellbeing of citizens Technology alone is insufficient benefits are not automatic and there are challenges Benefiting from transformational change requires sound public policy Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 8 Capacity building workshop SA Parliament Cape Town September 5, 2014

9 Fixed and Mobile subscriptions Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 9 M2M subscriptions not included

10 4 times Mobile data Traffic by end of 2019 Monthly consumption per device type GB 13 GB 1.4 GB 6.3 GB 0.65 GB 2.5 GB Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 10

11 Mobile application traffic outlook Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 11

12 Mobile Traffic Update Global total monthly traffic in mobile networks, 2007-Q YoY: 65% growth in mobile data traffic QoQ: 15% growth in mobile data traffic Note: Based on actual measurements Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 12 Traffic does not include DVB-H, Wi-Fi, or Mobile WiMax. Voice does not include VoIP.

13 Sub saharan africa By M Smartphone Subscriptions X 20 Mobile Data Traffic growth 710 M Mobile Broadband Subscriptions 930 M Mobile Subscriptions

14 20 times Mobile data Traffic by end of 2019 Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 14

15 population Coverage Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 15

16 Social networking comes second to SMS as the most used communication* mobile feature % Top 10 mobile features used weekly by mobile users in Sub-Saharan Africa Sending / receiving SMS* Listening to music Taking photos or videos Sub-Saharan consumers need for communication with friends and family pushes the usage of social media platforms Social networking* Browsing the internet* Playing games Using instant messaging* Using Bluetooth The youth are active participates in today s digital and information age they will be integral in the region s effort to eradicate existing inequalities, including the bridging of the digital divide Using calendar 34 Sending / receiving s* 26 Base: Mobile Users in Sub-Saharan Africa (NG, GH, ZA, KE, SN, CM) Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 16 Source: Ericsson ConsumerLab Platform, RSSA Consumer Report 2013

17 Key Consumer trends Consumer usage of mobile services is rapidly becoming data-driven. Consumers as creators of content Digital footprint spreading from city centres to rural area e.g. Mobile banking Social media and internet browsing taking top spot behind SMS; mainly driven by youth segment Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 17

18 Technologies for The Networked Society + + Mobility Broadband Cloud Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 18 Capacity building workshop SA Parliament Cape Town September 5, 2014

19 WINNING Mobile Broadband STRATEGY HIGH END & MASS MARKET DEVICES SERVICE DIFFERENTIATION NETWORK IS THE DIFFERENTIATOR Price Demand-based pricing / QoS S/N Subs Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 19

20 High end devices drive network capabilities Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 20

21 Low cost smartphones $33 $87 $135 Intex Cloud FX Firefox OS 2G Lava Iris 402 Android 3G & 2G Xiaome Redmi Q-core, Android 3G & 2G Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 21

22 Price Price MBB offerings get personalized 1 st Wave Standardization 2 nd Wave Differentiation 3 rd Wave Personalization One-size fits all Tiered Pricing Apps Devices Data volume Speed Demand Demand Modular Offering Create a relevant offering to each customer Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 22

23 Data Share plans drive usage and stickiness Offering > Choose devices > Get unlimited voice & text > One common data bucket More connections = ARPU & Retention Benefit > Low barrier, easy to upgrade > Easy to add devices > Attracts group, creates stickiness Tariff GB More of everything will drive ARPU and retention Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 23

24 Verizon Data sharing: More Everything Common data bucket Connect up to 10 devices Stimulate usage + more connections Use subsidies to migrate from Unlimited plans Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 24 Source: Verizon.com

25 Verizon rapidly migrating to Share plans > Migrating 47% of postpaid subscription to share plans within 2 years > Stepping away from unlimited plans > Growing in all dimensions > Accounts > Connections per account > Revenue per account Postpaid subs on share plan (%) 47% 0% 60% 40% 20% 0% Development per metric (relative 2011) ARPA Connections/account Accounts Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 25

26 Stepwise approach to increased share of wallet Clearly perceived value add... +GB Smartphone Data Plan Drive usage...with reasonable steps over time Users are willing to pay for added value! Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 26

27 India lowering the barriers Data plan price reductions fuel 43% data increase Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 27

28 user experience driver for Network Performance investments VOICE Dropped Calls and Call Success Rates triggered network upgrades PERCEPTION A B USAGE Clear traffic peak hours and places Dropped Calls, No perceived quality degradation when moving through network DATA A B Call Success Rate Usage pattern 24/7 everywhere Increased consumer awareness Apps in phone measuring network quality (e.g. Speedtest.net) PERCEPTION A B SMARTPHONES USAGE APPLICATIONS CLOUD Capacity, Speed, Security, Quality, Coverage Quality and application coverage noticed when moving through network Indoor quality increasingly important (quality degradation not acceptable) A B Latency, Latency Variation, Downtime Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 28

29 Frontrunners turn data growth into revenue growth Percent of 2Q07 levels 190% 180% 170% 160% Frontrunners Peers 150% 140% 130% 120% 110% 100% 90% CAGR % 2.6% 80% 2Q Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 29 Source : Ericsson analysis operator reporting (12 leading operators) *) Compound Average Growth Rate based on analyzed operators development Figures have been adjusted for inflation per country.

30 Performance drives loyalty Shapley regression analysis, showing the relative impact between each driver and loyalty to the operator brand (Net Promoter Score). Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 30

31 traffic generation, 2017 Metro: > 4,000 people/sq km Urban: 1,000-4,000 people/sq km Suburban: 300-1,000 people/sq km Rural: < 300 people/sq km Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 31

32 Het net addresses tomorrow s APP and user requirements Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 32

33 Mobility and Broadband One network many pipes WiFi DSL, Fiber Core network Internet Cellular Cellular WiFi Cellular Cellular WiFi Personalized services in an Always Best Connected environment Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 33

34 PACE OF CHANGE 50 billion connected things 1 billion connected places THINGS PEOPLE PLACES Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 34 Capacity building workshop SA Parliament Cape Town September 5, 2014

35 Summary Anything that benefits from being connected will be connected Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 35

36 Capacity building workshop SA Parliament Cape Town September 5, 2014 Public Ericsson AB 2014 Page 36