The GSM World Congress in Cannes starts in just 4 days. More than 28.000 people from all over the world will converge on a small seaside town in the South of France. Once again a wide range of companies will be showcasing the latest technology, solutions and services, while they talk about their expectations for the future. And once again, many suppliers will be telling us why it will be their solutions that will make the operators ARPU explode.
Once again Strand Consult will be attending with 3 representatives led by our CEO John Strand. As in the past, John Strand will be again speaking at the congress on the 15th of February at 12.25 - John Strand will use his presentation to not only describe how the discount providers and MVNOs managed to achieve such a huge success, but also how the markets have subsequently developed over this past year - and how John Strand thinks the market will develop over the coming years. The basis of John Strand's presentation is our report "The Moment of Truth - a portrait of the Discount Mobile Operators' success" Many operators and analysts have been using the information in this report to describe Denmark as a "nightmare" scenario the mobile sector - and even called the discount wave as the "Danish Illness"!
This years GSM World Congress will be the last one in Cannes – next year it will move to larger facilities in Barcelona. Even though this is a goodbye to Cannes, it is not a goodbye to all the promises for the future that so many companies in the mobile sector will be giving you – if you buy their products of course! One is tempted to ask oneself (with a little smile on ones lips): If all these products really can generate all the money that their creators keep on promising, how come the mobile market is not different from what we see today?
Strand Consult is looking very much forward to an exciting congress. It will be interesting to see who describes 3G as a revolution, who says it is evolution and who will comment that many of the services that just a few years ago were being labelled as true 3G services – are in fact today working perfectly well as standard services on 2.5G networks.
One of the questions that we often ask is whether the growth in value of the national mobile markets that will come when we migrate from a 2G environment to a 3G environment can actually finance the costs of the licenses, infrastructure and upgrading of the customers handsets? Or will the reduction in price on voice and SMS that we have seen across many markets mean that the growth in value of the mobile cake will be held back by the falling prices. Can players like T-Mobile, Vodafone and Orange show a growth in turnover that will justify a 3G business case over the next 3 years? The figures from DoCoMo already show that this will be difficult.
Many handset manufacturers claim that there will be a shortage of 3G handsets. Will this actually be the case – or are they simply trying to get operators to stock up on handsets. If that is the case, that strategy could backfire in the face of the traditional manufacturers if eager operators start falling over each other looking for new manufacturers that can deliver handsets – but are completely unknown in Europe.
We have difficulty believing that we will see a shortage of handsets equivalent to the one we saw in the early days of GSM – not only do we believe that there is no lack of production capacity, but also that it simply is in the interest of most handset manufacturers to migrate from the more price sensitive 2G handsets over to the more advanced 3G handsets.
And while we are talking about the handset market, many operators have ambitions about designing their own handsets. Are operators around the world in a better position to make the specifications and design mobile handsets? Many handset manufacturers have difficulty enough making money on the handset market – can operators like Vodafone, Orange or T-Mobile do a better job on the handset market than Nokia, SonyEricsson, Siemens, Motorola and Samsung? We don’t think so!
There are also many that dream of getting a place in handset heaven – amongst others are Microsoft and RIM. Microsoft has been very quiet the past 18 months. We have found the Microsoft handsets exciting and especially HTC has shown that it is possible to produce many innovative and advanced handsets based on Microsoft’s operating systems. We believe that Microsoft’s biggest competitor – is Microsoft themselves!!! Microsoft has some sort of belief that customers come by themselves - like they have been so used to in the PC world – the bear from Seattle ought to wake up and start taking more interest in the real mobile world and its customers.
RIM and their Blackberry are by no means invisible, despite only having around 2 million users they are still going strong. Their PR machine is beating the drums and the mobile Canadian dwarf is in reality much more visible than Microsoft’s mobile division. Operators around the world are spending millions launching RIM’s solution – even though it only appeals to a narrow segment and the numbers sold would make any other handset manufacturers feel bad. What RIM has done brilliantly is to build a story and brand around their product that the operators have swallowed hook, line and sinker – without checking up what alternatives the market had to offer!
Another of this years themes will be the next billion mobile customers. Where will they come from? Will it be today’s heroes that primarily dwell in high penetrated areas with falling voice and SMS prices – or will it come from operators that few have heard of today, that come from countries like Bangladesh, Pakistan, Nigeria, China, Brazil etc. We think that we will be changing the names on our lips over the next few years when the topic changes to who the new mobile heroes are. Just like in football – suddenly everyone will be talking about the more exotic countries that take everyone by surprise – and that show results that make Western Europe envious.
Many will also focus on the MVNO’s. All of Strand Consult’s customers already know that story and how the discount MVNO’s are affecting the future of the mobile market. Our report "The Moment of Truth - a portrait of the Discount Mobile Operators' success", that has just been published in its 3rd edition, describes the whole discount MVNO market. We have analysed the figures and show how the discount MVNO’s have stormed across the Scandinavian countries. We have great difficulty in seeing how Nokia managed to conclude that these new MVNO’s are a “business opportunity” for Nokia. The most successful MVNO’s neither sell or subsidies handsets and use no money on infrastructure. Perhaps Nokia will enlighten us in Cannes as to how they plan on making money out of this scenario – because we have been asking them this question for the past many months without any answer so far!!
Once again, the GSM World Congress will be giving us the answers to many questions – but we have no doubt that when the congress closes and we travel home again – we will have just as many new unanswered questions.
Isn’t that really what makes this business so incredibly fascinating?
Best wishes for a successful congress.