PositioningforSuccessin4G/LTE

DeclanLonergan
VPResearch,YankeeGroup
August21,2012

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AVirtuousCycleIsDrivingtheMobileEconomy
A Virtuous (or
Vicious) Cycle

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MobileBroadbandStrategies:HelpingCompaniesProfitfromData
Consumptiontrends

Businessmodels
Revenueflows

Brandpreferences

Demandforecasts

Buyingbehavior
Customers

Economics

Segmentationmodels

Profitabilityanalysis

3G/4Gnetwork
strategies

Serviceinnovation
Technology

GotoMarket

Complementary
accesstechnologies

Pricingstrategies

Telecomssoftware

Positioning&branding
Enablingtechnologies

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Channelevolution
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Agenda

TheContextforLTE
PositioningOptions
Takeaways

October2:YankeeGroupWebinar
AroundtheWorldWithLTE
Hosts:RichKarpinski andKenRehbehn
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4GIsBornIntoaDataCentricWorld
SMSgottheballrolling
Smartphonesand
mobileWebfueled
datagrowth
Tabletsandconnected
CEdeviceswilltake
mobiledatatonew
levels
Operatorcompetition
anddifferentiationis
nowadatagame

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Source:YankeeGroupsGlobalMobileForecast,March2012

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MultipleConnectedDevicesIstheNewNorm
Createsnewchallengesinpricingandcustomermanagement
WhatdeviceshaveyouusedtoaccesstheInternet(orInternetcontent)inthelastmonth?

Feature
phone

Smartphone

30%
29%
31%
31%
36%

France(n=409)
Germany(n=479)
Italy(n=613)
Spain(n=540)
U.K.(n=431)

63%
56%
52%
55%

France(n=220)
Germany(n=288)
Italy(n=355)
Spain(n=325)
U.K.(n=381)

Laptop

France(n=470)
Germany(n=508)
Italy(n=546)
Spain(n=604)
U.K.(n=529)

Tablet

France(n=70)
Germany(n=133)
Italy(n=153)
Spain(n=147)
U.K.(n=67)

77%

82%
73%
69%
75%
88%
49%
44%
43%
43%

0%
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U.S.45%average(across
featurephoneand
smartphoneusers)

10%

20%

U.S.88%

U.S.61%
63%

30%

40%

50%

60%

Source:YankeeGroups2011EuropeanandU.S.ConsumerSurveys
Base:AskedtothosewhoindicatetheyhaveInternetserviceathomeandowneachdevice

70%

80%

90% 100%
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QualityofExperienceIstheBasisforDifferentiation

Customerexperienceis
multifaceted:

Companyandbrand
Productsandservices
Channel
Deliveryandoperations

MNOsmustensure
consistent,transparent
customerinteractions
andcommunications

Sameprinciplesapply
to4Gpositioning

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Source:YankeeGroups2011EuropeanConsumerSurvey

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EffectivePricingIsEssentialforBusinessModelSustainability

Mobilebroadbandpricing
mustbe:

Competitive:toreflect
todayseconomic
circumstances

Transparent:tofoster
enduserconfidencein
data

Sustainable:toachieve
viablelongtermdata
businessmodels

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SustainablePricingIsKeytoSolving
theDataProfitPuzzle

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OperatorsMustBeTruetoTheirBrands

4Gchangesalot but
noteverything

Brandvaluesmustbe
clearandconsistent

MNOs shouldleverage
4Gtoreinforce
marketposition,not
changeit

But4Galsogives
MNOs anopportunity
toreassessmarket
strategyandtarget
customers

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Source:YankeeGroupResearchReport,2010

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3GPositioningWasSimpleComparedto4G

Abattlebetween
incumbentsand(in
somecases)onenew
entrant

Newplayerhadto
bedisruptive

Butmostcustomers
werenotreadyfor
3Gdataservices

Newentrants
strategieshadto
evolve

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Source:YankeeGroupResearchReport,2005

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MobileOperatorsFaceCriticalLTEDecisions
BusinessCase
Newservicesandrevenues,or
Solutionto3Gnetworkoverload

Products
Convergedlandline/mobileoffers,or
Aggressivepushforlandlinesubstitution

Timing
Technologyandmarketleader,or
Pragmaticfollowerstrategy

Whataresomecrediblepositioningoptions?

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No.1forTablets?

Target4Gspecificallyat
tabletowners

Beginbyunderstanding
tabletowners profile,
behavior andneeds

Theyareyoungerand
havehigherincomes
thannonowners

Consumerswhointend
tobuytabletsare
alreadyusingplentyof
data

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Source:YankeeGroups2012U.S.ConsumerSurvey

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No.1forCordCutters?
PercentageofHouseholdTakeUp

4Gmobile
broadbandcandrive
anewwaveofland
linesubstitution
Theopportunityis
mostobviousamong
leastaffluent
socioeconomic
groups
4Gpricingmustbe
appropriatetothose
customers needs

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Source:Ofcom CommunicationsMarketreport,August2011
Surveybase:Consumersaged15andolder(n=9,013)

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No.1forFamilies?

LessonsfromtheU.S.?

Shareddataplans for
userswithmultiple
connecteddevices

Appropriatefor
families orother
groupsthatcanshare
allowances

Enablesoperatorsto
capturemoredevices
andincrementalusage

Somesavingsfor
customers butnot
drastic

Requiresalotofplan
math regularvs.
sharedvs.prepaid

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No.1forPrepaid?

Rememberthis?
Prepaidavailabilitycreatedasurgein3Gadoption

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Source:YankeeGroupResearchReport,2005

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No.1forRoaming?

Billshockrestrictsdataroaming.
Syniverse Technologiesestimates
thatupto70percentof
internationalroamersdonotuse
mobiledata.

Operatorsareinnovatingatlast.
Commonthemeisgreaterprice
certainty,e.g.,flatratedailyor
weeklyroamingpasses.

Roamingcanbeadifferentiator.
Requirespackagesthattarget
silentroamersandaddressthe
needsofspecificusersegments

Operatorscanadd3Gbasedroamingpackagestocoredomestic4Gservices
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Datasource:EstimatebasedonYankeeGroupsGlobalMobileForecast,June2012

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SomeTakeaways
4Gisbornintoinadata
centric,multideviceworld
wherecustomerexperience
isking.
4Gstrategiesmustbe
consistentwithoperators
overallmarketpositioning
andbrandvalues.
Chooseyour4Gcustomer
targetscarefully,get
creativewithservice
packagingandgoforit!

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ThankYou!
Readblogsat
blogs.yankeegroup.com
Fanusat
facebook.com/yankeegroup
FollowusonTwitter
@YankeeGroup

DeclanLonergan
dlonergan@yankeegroup.com

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