five scenarios / strategies on the mobile broadband market
– which one will dominate your market…?
There are many different opinions on how the mobile broadband market will develop. At Strand Consult we have described five strategies / scenarios, that we believe the mobile broadband market will experience. The five scenarios are:
- The sale of basic mobile Internet – Increasing bandwidth, decreasing prices and fewer services.
- Mobile Internet and services providers – Increasing bandwidth, decreasing prices and a number of operators launch their own services.
- Quality mobile Internet and services providers – Increasing bandwidth, guaranteed QoS, stagnating prices and a wide selection of own services.
- The semi-intelligent mobile Internet provider – Increasing bandwidth and a number of third-party services.
- The intelligent mobile Internet provider – “Connectivity”, QoS, own services, many third-party services and the possibility of integration to other products (fixed line telephony, fixed line Internet, mobile products and hotspots).
There is no doubt that we will experience a number of mobile broadband providers with their own networks that have various different strategies and that those strategies can change over time. Similarly the development can vary from market to market, ranging from a market where some mobile broadband providers with their own network become mobile Internet providers with the ambition of becoming a “dumb” bandwidth provider, to markets where providers have ambitions of becoming intelligent mobile Internet providers, that both offer their own services and a number of third-party services on top of their mobile broadband solution.
The sale of basic mobile Internet – These mobile broadband providers will be similar to discount mobile providers, as their goal is to offer a simple access product with a simple pricing structure. The end user price of their product will be a decisive competitive parameter for these providers and if the market is dominated by this type of provider, it can result in mobile broadband price decreases accelerating. The type of customer for these products will typically be price conscious customers that need Internet access on the go, or as an alternative to DSL.
Mobile Internet and services providers – These mobile broadband providers want to differentiate themselves by offering their own services. They can thereby avoid only being bitpipes. By having their own services they can lock-in their customers – if the services are network dependent – and thereby take advantage of any network effects in the services.
Quality mobile Internet and services providers – These mobile broadband providers are more focused on offering a wide selection of services – resulting in customers choosing them as their provider due to their services. An additional important competitive parameter will be to ensure customers QoS within their own network, whereby services like video conferencing and IP telephony will function better. These providers will additionally most likely ensure that they have an amply dimensioned backbone network, ensuring that customers at any time of day and regardless of the number of simultaneous users, will receive a quality product. Their typical customers will often be corporate customers.
The semi-intelligent mobile Internet provider – These mobile broadband providers will offer a wide selection of third-party services, especially more advanced network services. This will be a significant competitive parameter for these types of providers and for many of their customers, the services will be more important than the actual access product.
The intelligent mobile Internet provider – These mobile broadband providers will focus on offering advanced convergence services and on delivering triple- or quadruple-play. They will be far more than simple bitpipes and will focus on delivering all types of telecom products to their customers – thereby creating “total” customers. This strategy puts enormous demands on the providers, especially in connection with sales and marketing, but also gives very good possibilities for being technologically innovative and being “early adopters”.
One could say that it is up to each individual provider to choose the path they will take. On the other hand, local market conditions can also influence how an individual market will develop in the short, medium and long term. Some providers will simply choose a discount strategy where they only focus on being a cheap and cost-effective bitpipe and where they perceive lower prices and higher bandwidth as their most important competitive parameter on the market.
Likewise you will see providers that believe that only trying to be a simple discount provider would be catastrophic in the long run when they look at the size of the investments they have already made – and are facing in the future – and therefore choose a more intelligent strategy with more services on top of the initial mobile broadband connection.
At Strand Consult we are convinced that most providers will focus on strategies C and D, as these two strategies are relatively easy to implement and both are a natural extension of the current VAS market strategies that many mobile operators already have, where third party content providers are a natural part of the services that customers are being offered.
We have thoroughly examined and analysed these – and many other issues – in our new report “Successful Strategies in the Mobile Broadband Market“. The report is therefore an efficient tool for mobile broadband providers in their efforts to create and implement an optimal strategy.
