#4 – What Neelie started, VoWi-Fi will finish up

Summary: In 2015, the US operators will benefit from VoWi-Fi, ironically at the same time the technology will disrupt European telecom operator business. While the US operators can benefit from improved coverage and customer satisfaction combined with CAPEX savings thanks to intuitive VoWi-Fi in devices (and networks) – the European operators will suffer from accelerated voice and messaging revenue decline and virtually lose EU roaming margins due to increased competition and easy to use by-pass solutions.


VoWi-Fi is a natural evolution in the US following LTE and carrier Wi-Fi investments. US operators will use VoWi-Fi to improve indoor coverage and to facilitate the move from legacy solutions to LTE and ultimately as a result realize savings in their CAPEX. US operators have already implemented price plans to fight cannibalization of voice revenues – i.e. offering all-you-can-eat voice plans. Additionally, the technology is in place to support VoWi-Fi (good LTE coverage, handover solutions and device support).

In Europe, there is likely to be no big bang LTE change, but rather a gradual upgrade and hence most countries will lack nationwide LTE for some years to come. Another difference is the (on average) better indoor coverage when compared to the US. With most traffic being non-LTE and without an urgent need to improve indoor coverage, European operators will lack incentive and pressure to implement VoLTE and/or VoWi-Fi. However, the situation allows for challenger/alternative operators to get into the competition with disruptive propositions. The challenger operators are likely to launch roaming and international call bypass propositions for SMEs and consumers. This will put pressure on the MNOs to renew their price plans, to focus on data pricing models with bundled voice and messaging, should they wish to fight the revenue leakage.

Having said all this, VoWi-Fi is still a disruptive technology when it comes to roaming. In the US, Sprint and T-Mobile, with their limited number of travelling customers, feel confident in including free roaming in their VoWi-Fi offerings. Yet to be seen how AT&T and Verizon will set their VoWi-Fi strategies, as they are potentially more affected by roaming. However, as in Europe people tend to travel more frequently from one country to another, this makes roaming a bigger business and therefore all European operators will be affected – the alternative operators will significantly boost the decline of roaming revenues of the European operators. Hence we claim that VoWi-Fi will finish what Neelie started.

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#5 – European pay-TV market goes 3C – Consolidation, Convergence and Collaboration

Summary: Northstream believes that in light of pressures from content cost and availability, new competition and changing end user behavior, the next step for the pay TV market in Europe will be to consolidate, converge and collaborate. Consolidation and convergence will increase user numbers and reduce churn and SAC pressure through bundling with fixed and/or [...]
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