Research Notes

GSM World Congress – a Preview by Strand Consult

In just a few days the GSM World Congress will start and once again over 50.000 people will meet to exchange knowledge, ideas and visions about the mobile future. One could call it the world’s largest trade related “get-together party” with the sole purpose of stimulating the mobile development that has over the past years changed billions of people’s daily lives.

For many years the conference has been held in Cannes – but has now moved to Barcelona and once again this year Strand Consult will participate, this time with five of our employees. Our aim is to collect knowledge, meet people and talk to our many customers that – like us – are spending five days in Barcelona.

After last year’s conference, where Strand Consult helped put focus on the MVNO market and some of the structural changes that the industry was facing, we believe that this year’s congress will primarily be focused on how to create services that end-users are willing to pay for. You can hear John Strand’s presentation about the MVNO market from the GSM World Congress 2005 here: John Strand 2005

On the one hand we will most probably experience technology suppliers like Nokia, Ericsson, Qualcomm, Alcatel, Siemens, Lucent etc. that will be telling us about their many unique offerings. We will be hearing their song about how if you purchase their technology the operators CAPEX will fall and ARPU increase. On the other hand we will most probably hear a number of operators admit that the prices of voice and SMS are still decreasing at a speed that is frightening to most people and that more and more operators like for example Tele2, TDC, TeliaSonera etc. are selling their basic offerings using a flat-rate model.

We are certain that if you want to describe this year’s GSM World Congress, the strategic focus will most likely follow the tendencies we have described in our latest report “Mega trends in the mobile industry – a question of life and death”. We believe we will be seeing a number of the industry’s top management focus their presentations on admitting that the industry is facing a paradigm shift.

The GSM World Congress 2006 will most probably be remembered by many as the conference were the attention moved away from the large operators like Vodafone, Orange, T-Mobil and Telefonica, over to the many smaller players that are starting to influence the mobile value chain. People will be talking about the MVNOs, media companies, content aggregators and innovative technology providers. There is no doubt that the industry is facing large changes, but who will be the future heroes: “the big old boys” or “the new small kids”? Strand Consult believes that the future innovation will be created by small companies – that then will be purchased by the large classic suppliers.

It will be exciting this year to see whether Microsoft is able to become more visible in the mobile universe. If you examine how Bill Gates boys from Seattle have been doing over the past years, it is scary that such a large technology provider like Microsoft has not been able to make themselves more visible on the market. It is a fact that the dwarf RIM from Canada has taken the role as mobile e-mail provider, despite the many Microsoft handsets on the market and despite the fact that many companies use Microsoft Exchange for e-mail. Some might call this mismanagement from Microsoft’s side and we would probably have to agree.

Regarding the geographical focus, there is little doubt that many will be focusing on the growth markets like India, Brazil, China, Pakistan and Bangladesh -countries where cheap handsets and SIM cards will attract millions of new customers. There is no doubt that these markets are exciting, on the other hand some of the largest challenges the market will be facing will call for new solutions, especially on markets like Denmark, Sweden, Finland, Austria, Switzerland and Germany, where mobile prices are plummeting at the same time as the operators are investing in the launch of 3G.

From our point of view, the mobile industry is – and will continue to be – one of the most exciting industries in the world and the best people in this industry will have very many exciting possibilities and opportunities. On the other hand we have no doubt that those that do not understand how to adapt to the new mobile reality will have a very difficult future ahead of them.

We are looking forward to some very exciting days in Barcelona – the GSM World Congress will again surprise many people this year and even though we will go home with many answers, we will more than likely have a number of new questions that will need answering next year….

See you in Barcelona – let’s party…

See Strand Consult’s predictions for 2006 here: Strand Consult 2006 Predictions

the 3. Generation Value Added Service Market

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