When we examine the condition of the world at the end of 2009, we can see that many companies have been hit hard by their financial crisis. The global economy has more or less developed negatively and many companies and industries have seen negative growth. However when you examine operators, very few have been affected by the financial crisis. In reality many operators are taking advantage of the crisis to implement cutbacks that improve their financial results.
The recession has been a good excuse to implement adjustments that ought to have been implemented years ago.
We believe that an increasing number of MNO's will also focus on reducing their costs in 2010. Their focus will be on a totally new level of "lean". Next year we will see operators opting out of business areas, outsourcing smaller or larger parts of their businesses and also trying to adapt their business to a lower cost level - their strategy will be to postpone CAPEX and reduce OPEX.
When we examined the growth in many countries of voice traffic and especially mobile broadband, there is no doubt that many operators have underinvested in their networks and will most probably continue to do so through 2010. In fact we will see a number of operators during 2010 that simply have network capacity problems and especially within the mobile broadband area will experience difficulty in delivering the services that they are marketing and selling to their customers.
One of the largest challenges that many operators are facing is the uncertainty that is a result of the politicians’ lack of understanding of the industry. In almost all countries, operators face the challenge of not knowing how the political system will handle the allocation of various new frequencies, how they will handle refarming and how they will handle the digital dividend.
Simply put, operators around the world face a period where a number of frequencies will be allocated (800/900/1800/1900/2100/2600 MHz) and where they will start redesigning their networks to use a combination of different frequencies and technologies (GSM/UMTSLTE) and this will be happening on some markets where politicians do not have a long-term strategy for the telecom sector that operators can use to plan their investments. We believe that 2010 will be the year when many operators rebel against the political system and demand a long term strategy that can help them plan their investments.
The industry's largest problem is the lack of industrial understanding within the political system. This is both a national and regional problem. In Europe it is the EU that handles the overall regulations, but if politicians within the EU vote for political regulations that are not thoroughly thought through, these problems will spread to individual countries as soon as they start implementing EU regulations. The year 2010 will be a year with many examples of new EU telco regulations that are flawed or incomplete and these flaws will become very visible as the regulations are implemented nationally.
The experiences with roaming regulations shows what happens when you make a regional problem into a EU problem by homogenizing prices across countries in Europe, without regard to local conditions. We believe that we will see an increasing number of operators during 2010 that will announce that the lower roaming costs have not had any particular influence on their voice traffic and that their SMS roaming traffic in certain countries has grown significantly.