|Summary: The transformed mobile web experience, brought about by the adoption of a range of new technologies, is creating a new arena for operators seeking to (re)build their role in the digital marketplace. Operators are potentially well-placed to succeed in this space; they have the requisite assets and capabilities and the desire to grow their digital businesses. This report examines the findings of interviews and a survey conducted amongst key industry players, supplemented by STL Partners’ research and analysis, with the objective of determining the opportunities for operators in the New Mobile Web and the strategies they can implement in order to succeed. (September 2013, Foundation 2.0, Executive Briefing Service.)|
This report explores new opportunities for telecom operators (telcos) in Digital, facilitated by the emergence of the “New Mobile Web”. The New Mobile Web is a term we have used to describe the transformed mobile Web experience achieved through advances in technology; HTLM5, faster, cheaper (4G) connectivity, better mobile devices. This paper argues that the New Mobile Web will lead to a shift away from native (Apple & Android) app ecosystems to browser-based consumption of media and services. This shift will create new opportunities for operators seeking to re(build) their digital presence.
STL Partners has undertaken research in this domain through interviews and surveys with operators and other key players in the market. In this report, we present our findings and analysis, as well as providing recommendations for operators.
The New Mobile Web
The emergence of the New Mobile Web is creating a new arena for operators seeking to (re)build their role in the digital marketplace. Many telecoms operators (telcos) are looking to build big “digital” businesses to offset the forecasted decline in their core voice and messaging businesses over the next 5-7 years. Growth in data services and revenues will only partly offset these declines.
In general, despite a lot of effort and noise, telcos have been marginalised from the explosion in mobile Apps and Content, except insofar as it has helped them upgrade customers to smartphones and data-plans. Most notably, there has been a shift in market influence to Google & Apple, and spiralling traffic and signalling loads from easy-to-use interactive apps on smartphones.
Technical developments, including the adoption of HTML5, better mobile devices and faster networks, are transforming the user experience on mobile devices thereby creating a “New Mobile Web”. This New Mobile Web extends beyond “pages”, to content that looks and behaves more like “apps”. By having such “Web-apps” that work across different operating systems and devices – not just phones, but also PCs, TVs and more – the Web may be able to wrest back its role and influence in mobile Apps and Content.
The Key Opportunities for Operators
This new digital arena is in turn creating new opportunities to support others; STL’s research found that respondents felt the key opportunities for operators in the New Mobile Web were around: Monetisation, Discovery, Distribution and Loyalty.
Figure 1 – Operators see the New Mobile Web creating most value around Payments, Monetisation and Loyalty
Telcos can leverage their assets
Telcos have the requisite assets and capabilities to succeed in this area; they are strong candidates for assisting in monetisation, discovery, distribution and loyalty, especially if they can link in their other capabilities such as billing and customer-knowledge.
This report sets out some of the existing activities and assets that operators should seek to exploit and expand in pursuing their ambitions in the New Mobile Web:
Strategic Options for telcos to succeed
Operators that are aiming to become ‘digital players’ need to adopt coherent strategies that exploit and build on their assets and capabilities. This report identifies 5 broad strategic options that operators should look to pursue and it sets out the rationale for each. These strategies are not necessarily mutually exclusive and can be combined to develop clear direction and focus across the organisation.
Seizing the opportunity
Although many operators believe that they urgently need to build strong digital businesses, most are struggling to do so. Telcos are not going to get too many chances to re-engage with customers and carve-out a bigger role for themselves in the digital economy. If it fulfils its promise, the New Mobile Web will disrupt the incumbent mobile Apps and Content value networks. This disruption will provide new opportunities for operators.
The operator community needs to participate in shaping the New Mobile Web and its key enabling technologies. Telcos also need to understand the implications of these technologies at a strategic level – not just something that the Web techies get excited about.
If telcos are not deeply involved – from board level downwards – they risk being overtaken by events, once again. Continued marginalisation from the digital economy will leave operators with the prospect of facing a grim future of endless cost-cutting, commoditisation and consolidation. This should not be inevitable.
- Executive Summary
- Introduction to the New Mobile Web
- Meeting Operators’ strategic goals
- Key opportunities in the New Mobile Web
- Operators have plenty of existing assets and could add more
- Case Studies
- Telco Strategies in the New Mobile Web
- Appendix 1: The New Mobile Web – “Rebalancing” from “Native”
Table of Figures
- Figure 1: On-line survey respondents
- Figure 2: Key opportunities in the New Mobile Web. Enabling…
- Figure 3: Areas of Value for Operators
- Figure 4: Telco assets that should be used to address the opportunity
- Figure 5: Operator Strategies
- Figure 6: Drivers of the New Mobile Web
- Figure 7: Data growth alone will not fill the gap in declining Voice and Messaging Revenue
- Figure 8: Survey results on operator ambitions
- Figure 9: Asian and MEA operators are the most ambitious
- Figure 10: Telcos in native app dominated geographies are more likely to believe that their ambitions could not be met in the current world. However, as stated above, there are notable exceptions…
- Figure 11: Key opportunities in the New Mobile Web. Enabling…
- Figure 12: Operators see the New Mobile Web creating most value around Payments, Monetisation and Loyalty
- Figure 13: A vast display ecosystem enables Web content providers to indirectly monetise their content
- Figure 14: Within Digital, operators see most value in Self-care, Mobile Payments and Banking, Video and Music
- Figure 15: Existing operator assets to build a role in the New Mobile Web
- Figure 16: iRadio Overview
- Figure 17: Tapjoy Overview
- Figure 18: Mozilla Firefox OS Overview
- Figure 19: Globe Telecom promotion
- Figure 20: Financial Times Overview
- Figure 21: AppsFuel Overview
- Figure 22: Summary of the 5 Broad Strategies
- Figure 23: Percentage of (US) smartphone and tablet users’ time by application area
- Figure 24: The industry is beginning to see a “re-birth of the Web”
- Figure 25: HTML5 seeks to bring the best of both Web and app worlds:
- Figure 26: Telcos see most HTML5 value in reducing the cost of service & maintenance and improving the time to market.
- Figure 27: The Industry sees the dominance of existing ecosystems as the biggest barrier to HTML5’s success