Flexible Deployment Options
Drive RCS Rollouts and Success
Declan Lonergan, Vice President, dlonergan@yankeegroup.com
April 2013
Table of Contents
Operators Face Major Challenges
Operators Face Major Challenges
Mobile network operators (MNOs) have experienced a period of dramatic growth
during the past 10 to 15 years. The global mobile services market increased in value
from U.S.$443 billion in 2003 to exceed U.S.$1 trillion in 2012. But the period of
dramatic growth has come to an end in most regions, and today MNOs face difficult
challenges on multiple fronts:
• Competition is intensifying in several markets, particularly at the low end where
mobile virtual network operators (MVNOs) are increasingly active and are creating
tougher price-based competition.
• Regulatory measures continue to erode MNOs’ top lines. This is most notably in the
form of reduced mobile termination rates (MTRs) and tougher international roaming
regulations. The combined effects of these different regulatory measures will
continue to negatively affect operators’ revenues for the next few years.
• Handset and OS vendors including Apple, Google and Samsung have increasing
influence within the mobile ecosystem. Though these companies have introduced
much-needed product innovation, their dominance is leading to MNOs becoming
a secondary consideration in some customers’ mobile purchase decisions. The
end result is that operator brands struggle to compete with handset brands for
customer loyalty.
• IP-based communications has emerged strongly during the past two to three years.
This has created a new category of competitors for MNOs in the shape of so-called
over-the-top (OTT) communications apps, and the list grows longer with each passing
day. Examples include Skype, Facebook Messenger, WhatsApp and Viber.
One of the consequences of these trends is that mobile operators’ average revenue
per user (ARPU) is under intense pressure. As shown in Exhibit 1 on the next page,
mobile ARPU is now either declining or flat-lining in most regions, and Yankee Group is
forecasting a relatively flat outlook through 2016.
This custom publication has been sponsored by Openmind.
1
How Should Operators Respond
to the OTT Threat?
3
MNOs Understand the Threat
5
RCS Momentum Is Building Steadily 6
MNOs Must Get the RCS
Proposition Right
6
Flexible Deployment Options
Are Critical
7
Conclusions and Recommendations 9