Mobile Voice and Messaging: Global Trends and Analyses

Mobile Voice and Messaging: Global Trends and Analyses

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  Mobile Voice andMessaging Global Trends and Analyses By ALI Saghaeian Chief Analyst & Consultant Telecoms, IT, and Media Saghaeian [at] gmail.com
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  Objectives • Analysis ofthe Growth Curves in Mobile • Understanding Telco Voice Standards and the Roadmap • Finding how cannibalization of voice and messaging happen • Investigating the role of OTT in Telco’s business revolution • Understanding Operators’ performance in Voice and Messaging Exercise Saghaeian [at] gmail.com
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  Agenda • Revenue GrowthCurve in Mobile • Mobile Voice Revenue Growth Curves • Global VoLTE and VoWi-Fi Market • Declining Voice and Messaging Trends • Messaging Case Studies Worldwide • OTT Messaging Traffic Worldwide Saghaeian [at] gmail.com
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  Revenue Growth Curvein Mobile The sigmoid or the S-curve growth: This model can be used to explain the growth of individual products, companies, markets, and global industries. Saghaeian [at] gmail.com
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   In amajority of the cases, the rise is slow when the subscriber penetration is below 25% and as the subscriber penetration approaches 70-90% band in a given segment, the Net-Revenue starts to hit its peak, stagnates for a bit and declines.  The amount of time the revenue curve stays in the stagnation phase depends on the market competitive dynamics and usage profile of the subscribers in a given country.  These are generally dependent on the maturity of the market, the economic and political conditions of the market, the regulatory regimes, the competitive forces that are at play in the market, and the availability of substitute solutions. Analysis of the Growth Curves in Mobile Saghaeian [at] gmail.com
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  Mobile Voice RevenueGrowth Curves The first cellular market started in Japan in 1979 Saghaeian [at] gmail.com
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  Mobile Voice RevenueGrowth Curves for some countries Saghaeian [at] gmail.com
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  Telco Voice Standards: What is our Roadmap? VoWiFi > Significant % of customers have poor in-building coverage in homes, transports… > VoWiFi can be proactively communicated to customers, e.g. T- Mobile US & EE > Initial launch can be without handover to mobile coverage VoLTE > Clear customer benefits (HD-Voice, faster call set-up, simultaneous voice and data services at 4G speeds) that build on existing base of HD-Voice customers > The experience can not be inferior to that today, e.g. handover required for launch. Therefore, no commercial launch until all major problems have been resolved RCS & Enriched Calling > RCS & Enriched Calling, when combined with VoLTE, will ensure that customers gets the most out of simultaneous voice, messaging and data services; major European operators (Orange, Voda, DT & TEF), see this as the vision for “future of comms” > However, benefits will only be relevant to customers when there is a significant base of enabled devices Saghaeian [at] gmail.com
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  VoLTE: Very EarlyDays • 25 operators have launched commercially in some capacity across 16 countries • VoLTE by itself is purely a technology migration • 200+ VoLTE capable devices announced VoLTE is less than 2% of subscribers Saghaeian [at] gmail.com
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  VoLTE Forecast 2015- 2020 VoLTE Subscriptions (Mio) Revenue ($ Bn) In 2020: • VoLTE subscription more than 1.4 Bn • VoLTE revenue going beyond $260 Bn Saghaeian [at] gmail.com
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  VoWi-Fi Market Scenarioand Forecast VoWi-Fi is going to surpass VoLTE by 2018 in terms of minutes of use VoWi-Fi extends the coverage of MNOs offering an cost- effective, scalable, high- quality approach whereas cellular coverage might be sketchy But VoWiFi also can help to win the battle against the erosion of revenue from over-the-top providers’ (OTTPs’) VoIP offersSaghaeian [at] gmail.com
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  OTT VoIP iscannibalizing Traditional Voice Revenues Saghaeian [at] gmail.com
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  Mobile Messaging RevenueGrowth Curves The first SMS was sent in 1991 in Europe Saghaeian [at] gmail.com
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  Messaging Trends andOutlook  In some of the emerging markets, messaging is still the second biggest revenue generation category after voice.  Messaging continues to be a big revenue generator but its share of the overall data revenues is gradually declining.  For the first time, in 2011, KPN the biggest Dutch operator started to publicly make noise about the impact of players like Whatsapp on their messaging revenue.  Now, over 90% of such subscribers preferred IP messaging. Hence, they were looking for a cheaper alternative to operator messaging. Saghaeian [at] gmail.com
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  Global SMS andMMS Traffic Saghaeian [at] gmail.com
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  Messaging in Turkey– Declining Trend Saghaeian [at] gmail.com
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  Mobile Messaging UsageGrowth Curves in Spain Saghaeian [at] gmail.com
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  Mobile Messaging Revenuecurve in Taiwan Saghaeian [at] gmail.com
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  SMS traffic growthslowing, MMS more volatile • Global SMS traffic appears to have peaked at just under 8 trillion messages, with flat growth in 2013. • MMS traffic still appears to be somewhat volatile, peaking at 371.3 billion messages in 2011 before falling substantially in 2012 and then recovering somewhat in 2013. We expect that in those markets where messaging apps are being used to send pictures, the use of MMS will continue to decline. Saghaeian [at] gmail.com
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  Variable growth inmessaging traffic in top 5 markets • China and the US are largest markets for SMS and MMS. • But while SMS seems to be holding steady, and MMS traffic is still growing for Chinese operators, the US operators are seeing a marked decline in both SMS and MMS traffic. Saghaeian [at] gmail.com
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  China Mobile: steadydecline in messaging revenues • China Mobile has seen its messaging revenues steadily decline in recent years. • Tencent‟s WeChat/Weixin incredibly popular – 396 million monthly active users , 14/05/14 Saghaeian [at] gmail.com
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  Vodafone Group: messagingtraffic down • Vodafone Group messaging traffic declined 6.6% in FY2014 to 332.6 billion messages (356 billion in FY13) • By country, Netherlands, Germany, Italy, Spain and Europe saw steepest declines: >25% • Turkey, Romania, South Africa only opcos to see increases in messaging traffic. Saghaeian [at] gmail.com
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  OTT Messaging TrafficWorldwide Saghaeian [at] gmail.com
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  Messaging will bethe most popular application / platform in Emerging Markets for 2014-2017 Saghaeian [at] gmail.com
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  Mobile Messaging Revolution Saghaeian[at] gmail.com
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  • Operators indeveloped markets reporting significant declines in messaging traffic, revenues. . . . . . OTT apps increasingly favored by subscribers, contributing to cannibalization. • Clear segmentation is emerging among messaging apps . . . Some, like WhatsApp, will continue to focus on communications, others (Line, WeChat, Kakao) have already become potent content and commerce platforms, generating good revenues • Internet companies acquiring, investing or merging with messaging app providers . . . Will Internet companies become the new telcos? • Mobile operators developing multiple responses, depending on technology and local market conditions . . . Partnership becoming very common, especially in emerging markets; emulation has little success so far. • SMS becomes one of a number of communications services mobile subscribers will use • . . . Mobile operators have an opportunity to protect the legacy SMS base i.e. those users who are slow/reluctant to move to IM apps. Conclusions on Messaging Saghaeian [at] gmail.com
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  Any Questions? 10/29/2015 27 ALISaghaeian | [email protected]