Mobile operators will look towards product innovation in their battle for market share
Editor’s Note: With 2016 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.
2015 was the year of the customer. Structural changes within wireless such as the unbundling of devices from plans have meant customers have more choice when it comes to choosing a handset and more flexibility when choosing a carrier to suit their lifestyle – without the handset bias. This has put pressure on network operators to increase value and engagement with users.
The prelude to this was the introduction of “early upgrading” campaigns, which have since become even more aggressive. The other standout for 2015 was over-the-top applications, which took center stage with a couple of historically large acquisitions that followed exponential growth and mass adoption globally. Popularity of these apps increased the growing migration of traditional voice and messaging services away from wireless carriers, signaling the future is commoditized data.
While these themes will continue to extend in 2016, the biggest trends are going to be driven by product innovation.
2016 will be the year of the connected device or “Internet of Things.” There will be 4 billion connected devices in the consumer sector alone, with 5.5 million things connecting every day. This will represent a 30% growth from 2015, and will be made up of increasingly diverse forms.
In the past, Americans connected to the Internet through an average of three devices. Beginning in 2016, this is going to skyrocket as everyday things become connected. And these things won’t just collect and spit out data, but will be programmed to think and make decisions on our behalf; like the watch that tells you get up and walk around your desk, the pot that waters the plant, or the car that checks your schedule and books itself in for a service when you’re not using it.
Wearables will play a big role in how we connect, with a big focus on fashion, fitness and security industries. Wearables will take many forms, from smart fabrics, to smart glasses/contact lenses, EEG headsets and an increased adoption of smart accessories. The most exciting part of this is we’ll see a shift away from heads down swiping phones to a more natural interaction with devices around us. For instance, a device called “bird” attaches to your finger and lets you point to control other connected things – dim the lights with a twist of the wrist, fly a drone or turn on the dishwasher from the couch. I predict 20 of the top 100 apps in 2016 will be connecting your smartphone to a device.
Providers of data will need to adapt to this innovation, and I predict we will see a convergence of billing and a move towards a single account across all the devices a user or a household controls. We are calling this a switch from the industry stalwart of average revenue per user to average revenue per account. Expect to see all the big players witch away from this 25-year-old moniker for a new one that encompasses the growing trend of spending more on mobile by spending less per device, but having many more devices.
In parallel, phone numbers – previously attached to a single device – will become device agnostic, with a single number working from a mobile, tablet, PC and car. Over time, this phone number will translate into an online identity, not dissimilar from a Facebook or LinkedIn identity that is always up to date, unique and country agnostic.
The great news for carriers is this is going to result in a huge jump in monthly data usage per person from 2 gigabytes today to 15 GB by 2020, and content will become a differentiation as we’ve already seen a number of strategic partnerships in this realm. Much of this will go unnoticed as the big four carriers are likely to start white-listing (giving away free browsing) to the most egregious bandwidth hogs such as Netflix and YouTube if the subscriber agrees to a much lower video quality. Why do they care? Free Netflix/YouTube at 360 dpi? I am only watching it on a 5-inch screen, so sure. I don’t need 4K on my iPhone.
Finally, outside of connected devices we are going to see mobile finally become global. The introduction of cross-border roaming plans and the growing ubiquity of wireless will mean people can stay connected while traveling without the previous fear of bill shock and the subsequent hassles of SIM swapping or dropping off the grid while away. Costs to call and text internationally are continuing to drop and users are seeking out OTT alternatives that make this communication free (after data connection). As these geographical borders come down, the market is going to open up. There’s going to be more competition and the fight to become the global carrier will ignite.
Photo copyright: min6939 / 123RF Stock Photo
