26. Mobile Operator Strategy and implications for the ecosystem
Almost all major mobile operators are public companies who have to answer to the
shareholders every quarter. They are measured by the revenue they generate each
quarter and the potential to generate more revenues in the future with existing and new
customers, and existing and new services. Thus, like other publicly-traded companies,
they have to do a delicate dance of managing a declining business while investing in
future growth. We believe that the operator strategies worldwide will be driven
primarily by the key constructs illustrated in figure 14 and described below:
Delay the decline
Both operators who are experiencing declines today and those who are approaching the
growth curve peaks have to figure out strategies to delay the decline of their voice and
messaging curves. This can be achieved by a number of key initiatives that involve a mix
of business models, consumer loyalty, integration of new technologies to reduce churn,
and embracing OTT/VAS services.
Extend the peak
For operators in India and China, who have yet to hit the peaks of their voice and
messaging curves, the strategy is going to be driven by strategies similar to the ones
discussed in the section above. For the access curve, where most operators are still going
to be riding the growth for the next several years, strategies will be driven by
technologies and business models that help manage the cost per bit to enhance the
margins per bit. Operators who are able to manage their margins better will have
significant competitive advantage. The reason Sprint is still able to offer unlimited data
on iPhone and Android devices is because their margins/bit are better than their
competitors.10 A number of operators like Rogers, Vodafone and Verizon have launched
data share plans that allow consumers to bundle multiple device per plan. This will
encourage users to become data users across multiple devices. This form of data pricing
and bundling will help extend the access curve peak in all markets.
Invest in the 4th curve
As we mentioned earlier in the paper, how operators react to the opportunity of the 4th
curve and how they decide to ride this next wave will write their destiny. Depending on
how they choose or are able to invest and compete will define what they will become in
5-10 years. Given that the 4th curve is not a singular curve but a combination of several
mini-curves that have their own profile, growth characteristics, competitive dynamics,
and opportunity landscape, operators will have to manage the 4th curve like an
investment professional would manage an investment portfolio or fund – diversify to
reduce risk and extend growth.
10
Part of the appeal is also in the simplicity of the message which helps in managing the churn.