<?xml version="1.0" encoding="UTF-8"?><rss xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" version="2.0"><channel><title>Northstreaming - Northstream predictions</title><atom:link href="http://northstream.se" rel="self" type="application/rss+xml" /><link>http://northstream.se</link><description></description><language>en-us</language><copyright>Copyright (C) 2009 mywebsite.com</copyright><item><title>#1 - Device dominance</title><link>http://northstream.se/prediction/1-device-dominance/</link><pubDate>Fri 30 Nov 2012</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Through our daily work with leading operators, equipment suppliers, service providers, investors and other interesting players in the telecom and internet industries we gain knowledge, insights and inspiration for our annual crystal balling on what&#039;s lying ahead. So also this year. 2012 has been a year of many good things, but other than continued mega growth in mobile data usage no significant move or shake has occurred. Media has been pre-occupied by lawsuits and countersuits between the largest handset vendors, none of which is really moving the industry forward. What moves the industry forward is however a continued LTE build-out, in both coverage and users. This year saw LTE deployments continue at pace in more and more countries, and now also the traditional first-mover UK finally joined the party. 

Now, for 2013, to summarize our key predictions; We will see operators requiring less small cells thanks to LTE&#039;s improved indoor coverage; The snowballing market power of device vendors may deviate mobile R&amp;D focus away from networks and open standards; European regulators to increasingly accept operator consolidation and network sharing in order to boost the LTE market; Outsourcing and Managed Services will become more focused on promoting vendors to actively address operator network OPEX as a whole; And, to round it off, Operators are going to face a rising rivalry from Microsoft, and IT players, in the enterprise communications market.

 


 ]]></description></item><item><title>#2 - LTE in Europe</title><link>http://northstream.se/prediction/2-lte-in-europe/</link><pubDate>Fri 30 Nov 2012</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Regulators to allow increased operator consolidation - and save LTE in Europe

Northstream predicts that during 2013 European regulators will increasingly accept operator consolidation in order to facilitate better market dynamics and growth for both larger and smaller players. This will be the catalyst to revitalise the European market, boost network investments moving forward and allow regained competiveness and sustainability.

For quite a while, third and fourth place operators in many European markets have been struggling to match the profitability of their larger cousins; and have often been driving prices down in the attempt to alleviate market pressure. This has triggered a spiral effect where leading players have had to follow, causing new price reductions, and so on, and leaving lesser room for increased infrastructure investments. As of today, despite growth in users and traffic, overall combined operator revenues in Western Europe are at 2005 levels. At the same time, demand for faster data access, improved coverage and higher quality requires increased investments in network modernisation and LTE. That equation is hard to balance. In an attempt to compensate for flat lining revenues European operators have increasingly adopted network sharing to reduce CAPEX and OPEX. However, these models have not been sufficient in easing margin pressure. This is partly because regulations have limited the level to which networks can be shared.

In complete contrast, the mobile network business in the U.S. is much healthier and the two leading players, AT&amp;amp;T and Verizon, dominate the market.  AT&amp;amp;T recently announced it would increase CAPEX 10 per cent to $22bn in 2013. The operator said it would also maintain that level for another two years. Presumably, much of this will be invested into a continued LTE network upgrade. This has been possible due to less price intensive competition; and increasing revenues and ARPU as a result of new service launches. For example, AT&amp;amp;T has launched a program called Mobile Share, enabling sharing of data plans across devices. This service allows them to push LTE subscriptions and in turn raise ARPU. Consumers also do not appear to be shying away from spending a little more for the increasingly valuable service level they enjoy.

Investors and operators have understood that some level of consolidation will ultimately help market dynamics. Now we believe the time has come when European regulators will fully grasp this as well. Otherwise the region will continue to fall behind in LTE network rollout. This is to the detriment of not only operators, but also for consumers.]]></description></item><item><title>#3 - Small cells</title><link>http://northstream.se/prediction/3-small-cells/</link><pubDate>Fri 30 Nov 2012</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[The &#039;small cell debate&#039; is ended by LTE roll-out (with some support from Wi-Fi)

Global LTE rollouts have sparked discussion about the rapid take up of small cells to extend high speed data coverage to public venues, enterprises and homes. However, Northstream believes that LTE roll-out will actually result in operators requiring less small cells than before.

Obviously, the pure macro network, even with the combination of best spectrum assets, does not serve all indoor broadband needs sufficiently; including coverage, QoS and capacity. Allocated LTE spectrum includes a combination of sub 1GHz (700, 800 and 900 MHz) and higher bands. Building LTE networks that combine sub 1GHz and higher spectrum assets actually helps to improve mobile broadband experience indoors.

However, heavy traffic generators like tablets and data modems will require further enhancements to improve indoor coverage. Operators will need to find economically viable solutions to cater for these devices. Non-licenced spectrum will be of assistance, and Wi-Fi has been established as a feasible option for indoor coverage. Wi-Fi has numerous benefits - including harmonised global spectrum, low cost, and easily deployable hotspots. The available (2.4 and 5GHz) Wi-Fi bands provide capacity and throughput that few operators can allocate for indoor use. Most offloading today is user driven. This is mostly because end-users are looking to get better coverage, an improved connection or simply trying to avoid using their mobile data quota.

Northstream believes that as mobile broadband matures, and LTE penetration increases, so will the complementary use of Wi-Fi indoors. As a result, operators will also develop a stronger role in directing traffic, as opposed to leaving that decision to the end-user. But this will require strong authentication solutions, as end-users need an easy and smooth experience, regardless of the type of connectivity.

In 2012 we saw operator controlled Wi-Fi solutions - mainly for public areas. At Northstream, we believe these deployments will increase in number throughout 2013. Though, we should not forget that the cost of fibre backhaul will be somewhat of an impediment. From an operator&#039;s perspective, the true benefit of Wi-Fi is the fact that they don&#039;t need to finance rollout, backhaul nor manage the majority of Wi-Fi small cells. With the support of device vendors, application development and network equipment vendors, operators will ensure that Wi-Fi use is much easier for end-users.]]></description></item><item><title>#4 - Managed services</title><link>http://northstream.se/prediction/4-managed-services/</link><pubDate>Fri 30 Nov 2012</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Managed Services is dead, long live Managed Services 

On a macro level, we still see overall revenue growth in managed services at a rate of 17 per cent each year. On a micro level, we see two out of four major managed service vendors retreating. Alcatel-Lucent announced it would review, and possibly exit, 25 per cent of their current 68 managed services contracts. Similarly, current financial pressure seems to impact NSN&#039;s willingness to bring in new Managed Services deals. Ericsson and Huawei provide little visibility of their managed service profitability; as their profit margin figures are embedded in their compound reports of professional services. Clearly, the industry is in a phase of intense competition in the managed service space. Northstream believes that a three player market, with sustainable margins, will emerge. These vendors will also try to position themselves higher up in the value chain of managed services.

At the early stage of telecom outsourcing any unwanted operational cost structures that vendors were forced to inherit in order to secure a deal could be swallowed by an expanding professional services organisation. This is because they knew there were additional managed service deals around the corner where surplus resources would surely come in hand. However, for several of the deals made in recent years, it has been more challenging for vendors to achieve synergies than the scope suggested. This has meant that synergies have taken longer to come into effect and has negatively impacted vendors&#039; enthusiasm.

Northstream predicts that, in order to maintain profitability within managed services, vendors will become less willing to risk being squeezed in-between operators&#039; OPEX reduction requirements and the pursuit of increased flexibility. This, in turn, will lead to sterner terms and negotiations for operators nearing renewals of their managed service contracts.

Similarly, operators realise that to remain competitive in the mobile broadband and LTE deployment era; they must secure control of their most important asset - their networks. This means that OPEX reduction cannot sustain its position as the single most important criteria when defining the future of outsourcing. More likely is that aspects like network quality focus, capacity flexibility and CAPEX investment manageability will have more prominent roles when defining outsourcing business models 2.0.

This will involve less of a &#039;blueprint&#039; on how to establish managed service models going forward; and instead an increasing amount of operator-specific responsibility sharing models. It is likely, a model will emerge where the core services with greatest synergy potential (e.g. global NOCs) will be combined with a more tailored, and local, solution for each operator. Especially for tier one and tier two operators, where a &#039;blueprint&#039; simply does not fit. To succeed, operators and vendors must define business models and operational processes that promote the vendor to actively address the operator&#039;s network OPEX as a whole, including legacy cost structure and maintaining (or improving) network quality and customer experience.
]]></description></item><item><title>#5 - Enterprise services</title><link>http://northstream.se/prediction/5-enterprise-services/</link><pubDate>Fri 30 Nov 2012</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Microsoft takes the lead for new generation operators

In today&#039;s highly connected and collaborative world, the needs of the enterprise extend far beyond voice calls. Business requirements are increasingly IT related; and enterprises are more closely embedded with and dependent on companies such as Microsoft than they are on telecom operators. Microsoft has leveraged its large enterprise presence with Windows and the Office suite, complementing it with VoIP and collaboration solutions, into a UC solution. Soon Microsoft will be adding mobile VoIP capabilities; and in doing so attack one of the last strongholds of the operator.

Challenging virtually all operators in all markets, Microsoft reaches enterprise customers on a global, as well as local scale, through its network of some 640.000 partners. No single operator can match this. They are all, at best, regional in terms of their reach. Local connectivity is always needed, but operators&#039; delivery to enterprises may be reduced to pure data connectivity - no services on top. This will prove a serious challenge to operators&#039; IMS offerings.

Due to regulations, a single telecom operator used to be the only one who could offer voice connectivity. De-regulation gave choice and competition, but services were still operator controlled. With the Internet and IP gaining in strength worldwide, voice-over-IP became an alternative to landline calling. However, operators still enjoyed strong relations with enterprise telephony. This is about to change and UC will act as a driver. Microsoft&#039;s UC revenues grew &#039;double digits&#039; from Q3 to Q4 2012.

Operators now face a very difficult choice. Should they partner with Microsoft? Or should they try to develop value-added solutions of their own? Or maybe opt to focus only on connectivity? We believe there will be many differing approaches in 2013 as operators try to cling to power and relationships with customers, but in the end it will be very difficult to compete with Microsoft and their likes on the enterprise turf.
]]></description></item><item><title>#1 - LTE uptake</title><link>http://northstream.se/prediction/1-the-long-and-winding-road/</link><pubDate>Sun 04 Dec 2011</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Northstream&#039;s unique insight gained from advising some of the world&#039;s leading mobile operators, infrastructure vendors and device manufacturers on market strategy and sourcing has been the inspiration to yet a new set of predictions. Northstream believes 2012 will be a year of continued network investment, and one where the industry will begin to recover. In 2011, mobile infrastructure vendors hit rock bottom after seven years of declining infrastructure pricing. In 2012, we expect infrastructure vendors to bounce back as the market matures, sub-scale vendors become too financially constrained to continue the price war, and operators start to charge properly for data while also taking a more holistic view onsourcing of systems and services. LTE will help further, but we&#039;ll only see a major breakthrough when support for a quality voice service is there. On the device side, we&#039;re going to see SIMs shrink, enabling new types of connected devices and paving the way for soft SIMs with enhanced over-the-air provisioning of services and capabilities. Similarly, we will see the beginnings of a big change in the apps space as the ecosystem moves towards the cloud and the tight link between applications and OS weakens. We also see one overall trend outside of these five: that operators will invest seriously in customer experience, and those that do will establish competitive advantage and significantly reduce churn. For more details on the predictions for the year ahead, click the icons below.]]></description></item><item><title>#2 - Network infrastructure</title><link>http://northstream.se/prediction/2-come-together/</link><pubDate>Sun 04 Dec 2011</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Price pressure on mobile network infrastructure will decrease for the first time in seven years

For the first time in seven years - since the entrance of the large Chinese equipment vendors - we are seeing the beginnings of an end to excessive price pressures. A number of factors have led to this development, and finally vendors will begin to see pricing that is in line with the real cost of delivering mobile broadband.

The infrastructure market is maturing and normalizing, and the result is that there is less aggressive pricing to win market share.  Ericsson and Huawei have created a clear leadership and will not contribute to price wars.  At the same time NSN, Alcatel-Lucent and even ZTE are under financial pressure and cannot continue to try to buy market share. 

For operators, the need for constant and ongoing network modernization increases the demand for more capable hardware, greater capacity and greater network optimization. As the complexity of planning and implementing a multi-service network increases, operators are taking a more holistic approach to their sourcing activities, putting less focus on price and more on finding the right partner.  Without the right equipment partner, operators will not be able to manage the spiralling growth in mobile data consumption. 
]]></description></item><item><title>#3 - Mobile data pricing</title><link>http://northstream.se/prediction/3-here-comes-the-sun/</link><pubDate>Sun 04 Dec 2011</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Innovative mobile data price plans will reverse the trend of revenue decline

In recent years, topline revenue decline has been the trend, largely due to competition for market share in saturated markets.  Contributing to this, new VoIP and messaging services from so-called &#039;OTT&#039; service providers are eating into operator revenues. These pressures, combined with the increased cost and complexity of building and running a mobile network, will expedite the trend of operator consolidation. That, in turn, will reduce price pressures. 

To take advantage of this, innovative marketing departments will lead the revolution, delivering new and compelling price plans for mobile data connectivity. Well packaged data plans will compensate for dwindling voice and messaging revenues, and will begin to correct the under-charging that has been inherent to mobile data in recent years. 

Ultimately, operators will have to focus more on being a &#039;connectivity provider&#039; and leverage the inherent positive price elasticity of data to increase overall revenues. Operators must capitalise on users&#039; willingness to consume and to pay for mobile broadband that is constantly improving due to strong innovation of both technology and services.  For some operators, we may even see data revenues exceed voice revenues by the end of 2012.
]]></description></item><item><title>#4 - SIM evolution</title><link>http://northstream.se/prediction/4-lucy-in-the-sky-with-diamonds/</link><pubDate>Sun 04 Dec 2011</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[SIMs will keep shrinking through 2012, and will eventually disappear into the cloud

We are gradually moving away from traditional SIM-based cellular connectivity, towards a soft SIM future. Throughout 2012, we will see continued developments in SIM technology to further reduce size - going from recent micro SIMs to nano SIMs - and to increase functionality and flexibility; leading towards a true soft SIM future. 

Apple, Google and other third parties will use their power to drive the change to smaller, more flexible SIM solutions in consumer devices, and then ultimately to soft SIMS based entirely on software and hosted in the cloud. Increased adoption of NFC and mobile payments, as well as the exploding M2M market, will require increased and more flexible over-the-air (OTA) provisioning of subscriptions - another driver. Operators will resist as the SIM has always been a critical operator-owned, operator-controlled component, but the change will come.   

Perhaps the final straw for the current SIM in handsets and tablets will be the mobile industry&#039;s fear of the growth of WiFi. In 2012, we will see an even greater proliferation of portable consumer electronic devices that take advantage of the effortless provisioning and true out-of-the-box connectivity of WiFi.  The user experience and the cost will both be superior to traditional SIM-based cellular connectivity; soft SIMs will be the only way to redress the balance.
]]></description></item><item><title>#5 - HTML5 and apps</title><link>http://northstream.se/prediction/5-maxwells-silver-hammer/</link><pubDate>Sun 04 Dec 2011</pubDate><category><![CDATA[Northstream predictions]]></category><description><![CDATA[Apps will become OS agnostic, decoupling the OS from the ecosystem

Apple and Google&#039;s dominance of the apps market will be threatened by the decoupling of apps from the OS. The change will democratize the apps space. It will erode the current duopoly, reduce barriers to entry and enable far more players to generate revenue from this unstoppable phenomenon.

Today&#039;s laggards will be major drivers of this change. BlackBerry OS and Windows Phone do not have the market share or the application ecosystem to compete with iOS and Android. To combat this, they will instead &#039;join&#039; the existing ecosystems and be instrumental in the drive towards &quot;the return&quot; of the web app.

BlackBerry devices will move to be able to run Android apps - we&#039;re already seeing this on the PlayBook and more devices will follow. Software that enables porting of Android applications over to Windows will build on the early work of the likes of BlueStacks and will rapidly take off. The arrival of HTML5, running in all OSs through the browser will add significant weight to the move.  

This decoupling will force OSs to compete on their own future-looking merits, not on the strength of their installed base.  In this environment, Apple in particular will find it even harder to justify their 30% margin in the App Store.  
]]></description></item></channel></rss> 
