Category Archives: Mobile telecoms

Ireland ‘the most expensive of the competitive telecoms markets’

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A report just published by consultancy Rewheel compares pricing of benchmark mobile tariffs across the EU and beyond.  The good news is that Rewheel categorise Ireland as one of the more competitive markets.  The bad news is their find of Ireland as ‘the most expensive of the competitive markets’.

Mobile telcos worldwide are facing the threat of losing revenue to so-called over-the top services (like WhatsApp, Viber, and the granddaddy of them all, Skype). The battle for superior functionality in traditional telco products is all but lost (MMS, anyone?) and  attempts to compete by launching services like Joyn are struggling  to gain traction.   Many telcos have turned to tariffs to try stop the slide towards becoming a dumb pipe: the development of price plans offering unlimited voice and SMS, but charging heavily for data access has become almost ubiquitous across the OECD.  Many of these tariff plans can be shared across families, thereby increasing the lock-in that we see when entire family is on the same network.  And because these plans are so similar to each  other, they can be directly compared.

This month sees an interesting report from mobile data consultants Rewheel entitled ‘Price benchmark of smartphone tariffs with unlimited minutes & SMSs in EU28, US, Switzerland and Norway – October 2013’.  The ‘executive preview’ (a teasing selection of the findings) is available to download here.

Rewheel country comparisonThe report describes mobile internet (at the risk of hyperbole) as ‘the fuel of digital economies’ and finds that pricing for these bundles in Europe’s ‘protected oligopolies’ (e.g. Germany, Spain, Greece and Hungary) is up to 2200% higher than the the EU’s most competitive markets (UK, Sweden, Finland, Denmark & Austria).  It also finds that big EU telcos tend to charge more.  No surprise: there is no point investing millions in a multinational brand if you can’t leverage it by charging a premium for services.

insight_17

And where does Ireland fit into this picture?  The report says “Ireland ranks as the most expensive competitive market (i.e. markets where a challenger like Hutchison is present). The price for a 2GB smartphone tariff with unlimited minutes and SMS is €35 which is slightly above the EU28 average.”  The graph below shows that Ireland shares this honour with another unnamed country.

Rewheel Ireland graph

This analysis tallies broadly with Comreg’s figures in the figures as described in their latest quarterly market report: pp. 65-69 of the report shows low-spending & prepaid Irish users paying rather more than average, and medium and high users paying the average price or a little less.

So what of the future?  With the recent purchase of O2 Ireland by Three, Ireland’s market is hardly going to become more competitive anytime soon.  Perhaps this consolidation will move Ireland from its position as the most expensive of the competitive economies to being one of the cheaper of the protected oligopolies!

The full report is available for purchase from Rewheel for €3000.

Insights from the IQPC number portability summit 2013

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Carin

Carin Johansson giving an excellent overview of the state of number portability worldwide

I had the privilege of attending the IQPC Number Portability Global Summit earlier this month.

Number portability has been important for the development of competition in telecoms.  The conference addressed a wide variety of topics around the subject.  Here are some of the points that resonated:

  • According to one well-respected speaker, 75 countries have implemented number portability (NP) on their fixed (FNP) or mobile (MNP) networks.
  • Many others, including Jamaica, Trinidad, Afghanistan, Armenia, Togo and Tunisia are likely to implement number portability by the end of 2014.
  • Some countries, e.g. Russia, are struggling against technical, commercial and political obstacles to implementing number portability
  • User experiences of MNP vary widely.  In Portugal, callers to ported numbers are greeted with a message warning them that the call may cost more.  In countries like Ireland, Ghana and Israel, mobile numbers can be ported in under an hour, whereas in some other countries it can take weeks.
  • In some countries (e.g. UK) the customer approaches her current network and requests porting (this is known as donor-led porting).  Best practice, followed by many countries, is that the customer requests porting from the network to which they wish to port (recipient-led porting).
  • The technical platforms and processes underpinning porting continue to evolve, in response to customer needs (or rather operators’ new product opportunities), technical advances and the pursuit of efficiencies.

 

My talk to the conference covered three areas:

1. The evolution of in the importance of number porting

Mobile numbers will continue to be an important way to be reached by almost all mobile users, but callers can now find and contact at least some of their targets on social media.

Porting

The evolution of the importance of number portability

Against that, the cost and difficulty of porting is now very low in most markets, so porting will continue to be popular for the foreseeable future.When truly portable mobile phones arrived (first for businesses, then with the advent of prepaid, for the mass market), the mobile phone number filled a need left unfulfilled: a simple reliable means of reaching someone anywhere, anytime.  Porting was introduced to improve the free functioning of telecoms markets.  In 2003, the value of porting to the Irish economy was estimated at £IR 129M.

More recently, social media has emerged as a far superior way to find and contact people.  Although it has limitations, it removes many of the costs of changing the mobile number.  However, in parallel the costs (monetary and service interruption) to users of porting continue to decline, and many operators incentivise port-in.  Number porting is here to stay.

2. Insights based on analysing porter data

Idiro has analysed data relating to porting customers in a variety of markets.  I presented a number of insights (anonymised, of course) on the characteristics of porters based on multiple markets.  I also described in detail the phenomenon of porting contagion.  The power of word-of-mouth results in many consumers following their friends when they switch networks.  This accounts for a high proportion of porting overall.  Big thanks to my Idiro colleague Lorcan Treanor for the analysis behind these insights.  Please contact Idiro to learn more about these insights.

3. How Idiro SNA helps meet the challenges of porting churn

The SNA analytics service from my employers, Idiro, is a perfect fit for the marketing problems around mobile number porting.  Idiro scores can be used in Member-get-member acquisition campaigns and in retention campaigns to reduce porting churn.

 

Freddie McBride

Freddie McBride of CEPT presenting on service portability

I was chairman on the second day of the conference, which focussed on Service Portability.  There is great interest in this topic – where the customer ports not only their fixed and mobile numbers but other elements of their package as well, up to the entire quad-play bundle.

Though the concept is an appealing one, in practice the challenges are large.  Imagine being a customer with a home phone, mobile phone, TV and broadband bundle, and moving it to a competitor.  Every provider’s service bundle is different, and porting the entire bundle will require the customer (or the recipient operator) to make careful choices.  In addition, speakers pointed out that the delay in porting different services will vary, so during a transition period the customer will be receiving some services from the donor operator and some from the recipient operator.

There are challenges aplenty there and it is clear that there is no consensus over the best way forward.  One might (at the risk of overestimating the similarities) say that the discussion on service portability is where the number portability was 25 years ago.

 

Overall, the conference was well-organised and the  speakers well chosen.  However, as with many other telecoms conferences, the voice of the customer was hardly heard at all.  Quality was mostly described  in technical telecoms terms, rather than the quality as measured by the user.  Almost no primary or secondary research on customer experience was presented by regulators, operators or vendors.  At the end of the conference (I missed one talk) I had learned nothing about consumers’ expectations for porting and how well they were being met.

If the voice of the consumer is not heard, how will their needs be met?  It was ever thus in the telecoms industry – or at least, it has been for the last 25 years – and it is a reason that OTT services like Whatsapp are eating SMS and MMS’s lunch.  Despite being excellent in what it did cover, by its omissions this conference reminded me again of why the telecoms industry needs to cop itself on and develop a passion for the customer, or risk its share of customer communications being progressively eroded.

(a version of this post appeared on the Idiro blog)

Children are turning away from mobiles and social media: OFCOM report

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Ofcom

OFCOM, the telecoms and media regulator across the water, has just published a comprehensive 200-page report entitled ‘Children and Parents: Media Use and Attitudes‘.

It covers childrens’ use of mobile phones, social media, TV and the internet and their parents’ approaches to same.  Among its findings are:

  • Significantly fewer children aged 5-15 have mobile mobile phones than last year (43% in 2013 vs. 49% in 2012)
  • Usage of tablet computers has tripled among the same age group
  • There are fewer TVs, radios and game consoles in children’s rooms than last year
  • Fewer children have social media profiles than heretofore, and the variety of social media platforms has increased

So has the tide turned? Is the growth of mobiles and social networking among children driven to some extent by fashion?  Certainly, one swallow does not make a summer – we will need to see whether these findings are borne out elsewhere – and moreover there is a lot of detailed information in the report behind these headlines.  Time will tell whether this is a future trend.

Comreg’s latest quarterly market report is just out

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The latest COMREG quarterly telecomms market report is out.

These reports are useful for anyone in the Irish telecoms industry.  They cover fixed voice, mobile voice, broadband and broadcasting.

A few points stand out in the mobile section of the latest report:

  • Overall Irish mobile revenue is down 1.2% in the last twelve months (p. 6).
  • The mobile penetration rate was 118.3% including mobile broadband and Machine to Machine subscriptions, and 99.5% excluding mobile broadband and Machine to Machine [M2M] subscriptions (p.8).
  • Fixed voice subscriptions have grown 3.9% in the last 12 months (That seems counterintuitive – perhaps it’s being driven by the growth in converged bundles?).
  • Two-thirds of all voice call minutes are from mobile (p. 12). No surprise there.
  • There are 340k ‘Machine-to-machine’ subscriptions within the mobile base (p. 49) which equates to 7.4% of the lit SIMs. O2 have the lion’s share of the market (p. 60). Well done O2!
  • Fig. 4.2.2 suggests the growth in postpay subscribers is coming from M2M and broadband subscriptions – interesting.  It seems that if we exclude the data-only SIMs, prepaid voice is declining a little, and postpaid voice is falling faster.

    Prepaid and postpaid

    The impact of M2M and broadband subscriptions on prepaid and postpaid subscriptions. source: Comreg

  • Fig 4.3.1 shows that voice minutes continue to decline, and SMS messages outnumber voice minutes for the first time.  This has been a long time coming.  I had lunch with a former CEO of Eircell last week, where he reminded me of the surprise in the telecoms industry when Eircell achieved half a million text messages a month.  How far we have come!  Moreover, the uptick in SMS volumes gives the lie to the notion that over-the-top (OTT) services are heavily cannibalising SMS traffic.

    Voics SMS MMS volumes

    Voice, SMS and MMS volumes over time. Source: Comreg.

  • Eircom (Meteor & eMobile) report a 1% jump in market share in the last quarter (p. 62).
  • Vodafone’s and Three’s ARPU outstrip that of their rivals (Compare the traffic market shares with revenue markets shares on pp. 62-63).
  • Since mobile number porting started nine years ago, nearly 3 million ports have taken place. That’s over half today’s number of subscriptions.

Overall, the quarterly report is a handy resource for telecoms industry professionals, and is worth a look through each quarter.

Joyn, the GSMA’s answer to OTT services, seems to be struggling

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Joyn is the GSM association’s attempt to offer a telco-controlled competitor to over-the-top (OTT) services like WhatsApp and Viber. As described in this article, the survey reports that most telcos so not believe it is the answer.

http://www.telecomtv.com/comspace_newsDetail.aspx?n=50361&id=e9381817-0593-417a-8639-c4c53e2a2a10

It’s rather sad, but I guess, as the article, points out, any new product that relies on the cooperation of the majority of mobile telcos worldwide is highly unlikely to succeed nowadays. Back in the 1990s, roaming and SMS were implemented across the GSM world – but would the same happen again if they were developed today?

Perhaps the best hope for a telco response to OTT services would be a basic OTT service that worked anywhere but that gave enhanced features & benefits where supported by a participating telco.

Finally, let’s remember that this is a survey of the telcos. Far more important would be the opinion of the market!

Study claims as many as 40% of under-35s use IP messaging

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This Cellular News article quotes consumer research in Germany, Poland, Spain, the UK and the USA that finds 40% of 18-35s use IP messaging.

Only 40% of under 35 smartphone users using IP messaging services like Whatsapp, Facebook chat, Viber, etc?

OK, that research wasn’t done in Ireland but I’d guess in Ireland the percentage using IP messaging is over 70%… no?

Prepaid mobile – has it peaked?

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According to a GSMA Wireless Intelligence report just published, prepaid mobile has peaked. The proportion of mobile customers opting for prepaid plans is forecast to decline as postpaid becomes more popular worldwide, except in the Americas.

This does seem to tally with the facts on the ground as we in Idiro experience them – our mobile operator customers worldwide are finding that their consumer users are switching in larger number from prepaid plans to postpaid.

However, extrapolating this to a long-term trend is not so obvious.

From when Portuguese operator TMN gave us the world’s first real prepaid mobile phone service until the advent of smartphones, the choice of prepaid vs. postpaid plans was, in the developed world, linked to the consumer’s attitude to debt and her ability to get credit. I wrote a thesis (download) on the subject for my MA in marketing back in 1999.

Nowadays, everyone wants a smartphone and a data plan. (Idiro is still reporting high viral contagion of  smartphone purchase among consumers.) And smartphones are expensive – often beyond the reach of the younger consumer. In countries where postpaid handsets are heavily subsidised, postpaid plans offer a way for the less well off consumer to get her hands on a new smartphone, and that seems to be driving the swing to postpaid plans in OECD countries.

But there are problems. Some mobile operators privately report high bad debt rates among new smartphone customers – and attempts by telcos such as T-Mobile USA to unbundle the phone subsidy have run into problems. There are masses of lower-cost smartphones in the pipeline – but it remains to be seen whether these will be cool enough for the consumer in the OECD or cheap enough to be affordable without a subsidy in less advanced markets.

Time will tell whether the postpaid mobile continues to grow at this pace. In my own view the answer is linked to the price of smartphones, the growth of banking and credit checking services in the developing world, and above all to the global economy and its ability to create wealth for consumers.

(A version of this post also appears on Idiro Technologies’ website.)

NFC payment on mobiles in Ireland?

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Here’s an interesting article on NFC (Near Field Communications) on smartphones. The latest phones can do it, so will it work in Ireland anytime soon? Maybe it already does & a reader can enlighten me.

A few months ago AIB sent out some new VISA debit cards. They’re supposed to work already for NFC by just tapping the card on the till thingy. When the helpful AIB bank employee explained that I’d be hit for a bank transaction charge each time I used it, my interest in using it instead of cash to buy my paper or my sangwidges evaporated. On such small but important details do product launches fail.

Still, it’s be interesting to hear how usable NFC payments are in practice. Have any readers tried to use a NFC-enabled phone to pay for something, anywhere?

4G LTE coming to Ireland

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So, Vodafone Ireland announce their launch of 4G LTE starting with Kilkenny. That’s great news.

One small challenge for the telco marketers is that 4G’s a rather fluid term. This article discusses the issue of everyone naming their fast mobile data offering as ‘4G’. In some other countries, 4G is the term used to market HSPA and HSPA+ services – for example in Jamaica. Here in Ireland, Imagine.ie call their Wimax service ‘4G’ – as do Intel.

Not that any of this will bother the average punter, of course – at the end of the day, all the user cares about is how well it works.

Congratulations to Vodafone Ireland – hope the rollout reaches Dublin soon!