Five new challenges for APAC telecoms in 2012

 

 

The continuing movement away from feature phones towards smartphones and tablets running “light” operating systems will continue to affect operator strategy. It will have a significant impact on network investment, service pricing, and will drive operators’ value-added service offerings. Application functionality and content will become increasingly reliant on the network and cloud services.

 

Consumers are no longer content to purchase a device based solely on hardware features and price. Successful devices will need to integrate applications, content, and services into the platform.

 

The emergence of cross-platform development based on web standards and/or proprietary Rich Internet application runtimes provides a potential route away from the current reliance on proprietary vendor-controlled app stores. The challenge for operators over the next two years lies in managing this transition, and using it to move up the value chain in delivering applications and content to users of smart devices on their networks.

 

 

With data traffic increasing exponentially, operators are being forced to implement a mix of technologies to alleviate network congestion. Advanced pricing schemes, such as quality of service and prioritization-based tariffs, have been hard for customers to understand and therefore difficult for operators to sell.

 

In some markets, operators have continued to embrace Wi-Fi offloading. While femtocells are gaining some traction in Asia-Pacific, the business case for them is very operator- and market-specific. Adding to operators’ dilemma is the debate surrounding picocell, macrocell, and microcell networks.

 

Operators will ultimately roll out a combination of solutions. We expect to see several more LTE networks launched, more extensive Wi-Fi offloading, and increased discussions of heterogeneous network solutions in Asia-Pacific in 2012.

 

A lack of sufficient backhaul will be a major component of capacity challenges in 2012. Mobile operators that have not already done so will look to move their backhaul to packet technologies (typically Ethernet) in conjunction with capacity upgrades.

 

 

Bundling strategies have begun to gain traction, and we expect this trend to accelerate in 2012. Telcos with bundling strategies maintain that the net outcome of bundling is revenue growth and reduced churn.

 

Ovum expects to see more bundling strategies emerge in 2012, particularly from second tier operators. There is also a significant bundling opportunity for mobile-only operators in countries where governments are deploying wholesale-only fiber NGA networks.