Top predictions for the telecom industry in 2010

MANILA, Philippines - Researches done by Informa Telecoms & Media on how the next 12 months will be for the telecommunications and media industry reveal a 2010 marked by slow recovery, broadband access monetization, cost control, and partnership with Internet companies.

Mark Newman, Informa Telecoms & Media’s chief research officer, believes economic recovery is in the horizon that will give telecoms and media players at least a slow revenue growth in the year to come.

However, the dominance of the Internet and the transition from hardware to software and services mean that the landscape is becoming increasingly competitive and companies will need to shift their strategies and implement cost-cutting measures to survive these new market dynamics, he adds.

Below are the things that Newman’s research firm predicts will unfold in 2010:

• ‘Widgets’ will become the key to harnessing power of the mobile Web.

All device vendors now see potential opportunities in offering widgets since these applications enable them to enhance the value of their devices and complement revenues from handset sales. Because handset vendors can no longer rely on mobile phone sales to sustain growth, particularly in mature markets, they must now look at other opportunities, such as enabling content creation and offering services through application stores, the Internet, and widgets.

• Fixed broadband operators will experiment with new business models.

As broadband providers deal with increasing speeds and declining prices, they must now face up to the need to grow revenues in saturated markets.

• Mobile LTE (Long Term Evolution) commercial launches will slip to 2013/2014 but LTE’s role as a provider of rural broadband connectivity will gain momentum.

2010 will be a year of further LTE trials, which will move back the launch of commercial services. Informa expects only a handful of cautious early forays from the likes of Verizon and NTT DoCoMo toward the end of the year. Mobile LTE commercial launches in GSM-only markets will slip back to 2013-2014 as HSPA+ comes to the market. 

• IPTV operators will embrace “over-the-top” TV and open Internet apps.

Following years of promise but little activity, there are now an increasing number of ways that content providers will be able to reach the TV. These include open specifications such as Canvas and HBBTV, via connected devices such as the Xbox 360 and via initiatives within the consumer electronics industry such as Yahoo’s Connected TV initiative. Many of these initiatives should be commercially launched by 2011, if not 2010, Informa says.

• Operator app stores will struggle to compete with handset-manufacturer initiatives; Android will emerge as a worthy competitor to the iPhone.

Operators will be the ones that will most struggle to make a success of their application stores, unable in most cases to compete with Apple and other vendors in global reach. Their biggest chance of retaining a significant role in the mobile applications’ value chain will be as billing enablers, since most handset/OS vendors realize they need carrier billing to get downloads going on their app stores. Beyond Apple, Google will be the vendor to make the greatest headway with its Android Market, notes Informa.

• Network sharing and outsourcing will gain in popularity as the drive toward cost-control intensifies but the network itself will remain a key point of differentiation for operators.

Informa sees more telco partnerships in 2010 as operators attempt to extend coverage and reduce costs. Both network sharing and outsourcing will continue to gain momentum as mobile operators seek to reduce their capex and opex.

• Enhanced address books will become a focus for mobile operators and handset manufacturers.

Mobile operators and handset vendors are poised to follow Vodafone, T-Mobile and Motorola in enabling enhanced address book services for mobile subscribers. These will be made available by the mobile operators as an application that is pre-loaded onto the device or downloaded over-the-air, and by the handset vendors as a native feature. According to Informa, mobile operators will launch enhanced address books as a focal point around which to aggregate a range of community, messaging and content services and seize back the initiative from online brands.

• HDTV will reach tipping point but platforms still need to increase channels to win over subscribers.

HDTV is here, but 2010 will be about getting the critical mass of channels and win over subscribers to guarantee its success. Informa says providing only a handful of HD channels is not enough to make for a successful package.