Femtocells in the Consumer Market: business case and marketing plan. Alastair Brydon and Mark Heath with Andrew Parkin-White Edited by Claire Varley

Transcription

1 Femtocells in the Consumer Market: business case and marketing plan Alastair Brydon and Mark Heath with Andrew Parkin-White Edited by Claire Varley

2 Analysys Research Fixed Networks and Services Analysys Research Fixed Networks and Services Western European Fixed Telecoms: market sizings and forecasts How to Succeed with Fixed Mobile Convergence Quadruple-Play Bundling Strategies The Acceleration of Fixed Mobile Substitution in Western Europe: facts and figures Business Data Services: growth opportunities and forecasts for Europe European Cable: strategies for success Prospects for Local Loop Unbundling and Bitstream in Central and Eastern Europe Fixed Mobile Convergence in the Enterprise Voice Market Strategies for Selling More to SMEs: analysis of demand for broadband managed services and service bundles Fixed Mobile Substitution in Western Europe: causes and effects Opportunities for Non-traditional Players in Communications Markets Mobile Networks and Services Analysys Research Mobile Networks and Services The Mobile Advertising and Marketing Revolution The Central and Eastern European Mobile Market: trends and forecasts The Western European Mobile Market: trends and forecasts Seizing the Opportunities from Enterprise Mobility The Middle Eastern Mobile Market: trends and forecasts The Future of the Global Wireless Industry: scenarios for The World s Top Ten Non-voice Services for Mobile Operators Picocells and Femtocells: will indoor base stations transform the telecoms industry? Mobile Operator Strategies for Fixed Broadband Strategies for MVNOs Mobile Number Portability (MNP): strategies for operators and regulators Person-to-Person Mobile Messaging in Western Europe: forecasts and analysis Next-Generation Telecoms IT Analysys Research Next-Generation Telecoms IT Best Practice in Telecoms Service Delivery Billing and OSS Trends: the transition to telecoms IT The Next-Generation Bill: commercial and technical strategies World Telecoms BSS and OSS Markets: trends and analysis Billing for Mobility: strategies for convergent charging Published by Analysys Research Limited St Giles Court 24 Castle Street Cambridge CB3 0AJ UK Tel: +44 (0) Fax: +44 (0) research@analysys.com Registered in England No Analysys Research Limited 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. ISBN November 2007

3 Contents 0 Summary viii 1 Interest in femtocells is growing, and business cases and service propositions must be prepared MNOs are investigating commercial deployment of femtocells Key questions remain over the success of femtocells 2 2 Operators and equipment vendors must keep a clear commercial focus on femtocells MNOs are preparing to launch consumer femtocell propositions in Operators and vendors must build the case for commercial roll-out using realistic costs A business case framework helps MNOs to formulate and execute an effective femtocell strategy MNOs should develop compelling service propositions for key market segments MNOs should examine alternatives to femtocells 9 3 For voice services alone, the business case for femtocells is uncertain MNOs and femtocell vendors have focused first on voice telephony Increasing affordability of traditional mobile will reduce the appeal of femtocells Consumer inertia, mixed marketing messages and possible health concerns may dampen demand Voice is not network intensive, limiting 3G network cost savings 17 4 Mobile TV, video and audio make the business case for femtocells Femtocells could be highly effective for mass-market mobile TV, video and audio services indoors Much mobile TV and video usage will be indoors, where femtocells perform well Femtocells bring similar benefits for the delivery of radio and audio in the home Femtocells are essential to the profitable delivery of affordable video and audio services in the home Femtocells could enable big savings on 3G macrocell network costs Femtocells could allow operators to deploy less dense broadcasting networks 28 Analysys Research Limited 2007 Contents

4 iv Femtocells in the Consumer Market: business case and marketing plan 4.7 Mobile video and audio improve the business case for femtocells 29 5 Broadband access and location-aware services add to the case for femtocells Femtocells could enable MNOs to offer compelling and profitable mobile broadband services Femtocells could enable new location-aware services 35 6 Femtocells are preferable to the alternatives, and MNOs should start developing propositions Alternatives to femtocells are less attractive when a broad service mix is required MNOs should start to develop compelling propositions based on femtocells MNOs should include a video and audio portfolio prior to femtocell launch 39 Actions 40 Market intelligence services from Analysys Research 44 Reports from Analysys Research 45 Custom Research: meeting your information needs 46 Analysys Consulting 47 List of Figures and Tables Figure 0.1: Major revenue and cost elements of an MNO s business case for femtocells ix Figure 2.1: Major revenue and cost elements of an MNO s business case for femtocells 6 Figure 3.1: Increase in the proportion of mobile-originated voice traffic in Western Europe as the mobile price premium has decreased, 1Q 2004 to 4Q Figure 3.2: Increase in the proportion of mobile-originated voice traffic in Finland with lower average spend per mobile minute, 1Q 2004 to 4Q Figure 3.3: Mobile-originated voice traffic compared to mobile price premium in various Western European countries, 4Q Table 3.1: Comparison of network capacity consumption by a range of services 17 Table 3.2: Summary of the business case for deployment of femtocells to support voice services in a variety of scenarios 18 Figure 3.4: MNO s costs associated with femtocell deployment for four voice telephony scenarios 19 Figure 3.5: MNO s revenue gains associated with femtocell deployment for four voice telephony scenarios 19 Table 4.1: Estimated indoor usage of mobile TV services based on DVB-H trials 23 Table 4.2: Estimated indoor usage of mobile radio services based on UK DAB-IP trials 26 Table 4.3: Estimated revenue per megabyte from indoor service use, taking into account variable network cost 27 Table 4.4: Amount of data diverted from a 3G macrocell network by femtocell use: an example usage profile 28 Table 4.5: Summary of the business case for deployment of femtocells to support voice, video and audio services in a variety of scenarios 29 Contents Analysys Research Limited 2007

5 Femtocells in the Consumer Market: business case and marketing plan v Figure 4.1: MNO s costs associated with femtocell deployment for four voice and non-voice scenarios 30 Figure 4.2: MNO s revenue gains and cost savings associated with femtocell deployment for four voice and non-voice scenarios 31 Table 5.1: Examples of mobile broadband services currently offered by MNOs 33 Table 6.1: Examples of femtocell service propositions to appeal to different market segments 38 Authors Dr Alastair Brydon and Dr Mark Heath are founders of Sound Partners Ltd and authors of more than 35 reports from Analysys Research, including How to Succeed with Fixed Mobile Convergence, The Acceleration of Fixed Mobile Substitution in Western Europe: facts and figures, Seizing the Opportunities from Enterprise Mobility, The Future of the Global Wireless Industry: scenarios for , The World s Top Ten Non-voice Services for Mobile Operators, Picocells and Femtocells: will indoor base stations transform the telecoms industry?, Mobile Operator Strategies for Fixed Broadband, The Business Case for WiMAX, Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe, Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe and Prospects for the Evolution of 3G and 4G. Alastair is CEO of Sound Partners Ltd. Prior to joining Sound Partners, he reported to Nokia s European management team and worked with many of Nokia s customers to implement market firsts ranging from the introduction of prepaid mobile tariffs to new massmarket content services. Previously, Alastair worked in a number of roles for the BT Group, focusing on the evolution of wireless services, networks and technologies. He also contributed to international research and standardisation of GSM, DECT and 3G. Alastair holds BSc and PhD degrees from UMIST, where he was awarded the IEE Prize for top student. Mark is Director of Research at Sound Partners Ltd. In the past, he has held a number of marketing and business development roles in Nokia, ultimately becoming responsible for strategy and business development across Europe. Previously, Mark was responsible for business planning at BT Cellnet in the UK, after spending six years at BT in wireless systems research and development. He holds BSc and PhD degrees from the University of Leeds, winning the University prize for his research in telecommunications. Mark also holds an MBA, graduating as top student from Henley Management College. Andrew Parkin-White (Principal Analyst) has gained a deep understanding of the strategic and operational issues facing the mobile industry during his 17-year career. Formerly at Ovum, where he had been Managing Director of Consulting, Executive Board Director and, prior to that, leader of mobile research and consulting activities, Andrew s extensive experience of working in senior operations roles for operators and vendors is combined with a first-class research and consultancy background. He has also held managerial roles in strategic planning and marketing with organisations including BT, Marconi and Orange. Analysys Research Limited 2007 Contents