It has been a tough 12 months: the war in Ukraine, macroeconomic uncertainty and rising energy prices inevitably brought problems. During this time, we also saw major changes at Vodafone, high-profile 5G launches in India and the US, momentum for e-SIM and satellite broadband and emerging operator strategies for the much-vaunted metaverse.
Take a look and let me know if you agree or disagree with my choices.
Operators Push Big Tech to Pay for Networks
In 2022, the telecom industry issued repeated pleas for large technology companies to contribute to the cost of deploying network infrastructure. The argument is that making vast upfront investments is unfair without contributions from the small number of companies that account for the lion’s share of use.
As I argued here, I’m unconvinced that these claims are justified. Without content, operators’ services become far less relevant — that’s why many have chosen to pair up with the likes of Netflix and Amazon to offer higher-priced bundles. In many ways, operators’ very existence depends on successful partnerships with the companies they’re now trying to penalize.
This will remain a hot topic going into 2023 and one that CCS Insight will be following closely.
All Change at Vodafone
A tumultuous year ended with confirmation that CEO Nick Read will leave his post after four years at the helm. Mr Read had come under growing pressure from disgruntled shareholders amid disappointing stock performance and high levels of debt.
Toward the end of his tenure, Mr Read increasingly sought mergers and acquisitions as an activist investor dialled up the pressure. Vodafone recently agreed a co-control deal for its towers business, sold its Hungarian unit and confirmed discussions to merge with Three UK. But deals in targeted markets such as Spain and Italy proved elusive — maybe he could have held his role for longer if he had been able to reach agreements there.
Also in 2022, Middle Eastern operator Etisalat by e& took an 11% stake in Vodafone, and French telecom billionaire Xavier Niel bought a 2.5% stake.
India Debuts 5G
The world’s second-largest mobile market moved boldly into the 5G era during 2022. A blockbuster summer auction in which operators shelled out nearly $19 billion on spectrum preceded commercial network launches from Reliance Jio and Bharti Airtel. Both outlined bold coverage ambitions, with Bharti noting it had achieved 1 million unique 5G subscribers after just 30 days. CCS Insight’s latest 5G forecast, published in November 2022, expects 334 million 5G mobile broadband connections in India by 2026 (see Market Forecast: 5G Connections, Worldwide, 2022-2026).
BT Prioritizes EE Brand for Consumers
In April, BT confirmed that it had begun plans to make EE the company’s principal consumer brand (read our analysis of the announcement: Instant Insight: BT Announces Consumer Branding Shift).
I’ve always argued that running two major brands couldn’t continue indefinitely as it brings additional cost and complexity, both internally and for customers. I had already observed a greater focus on the EE brand in home broadband, an area traditionally synonymous with BT, so this move felt like it had been on the cards.
Discussing the decision, Marc Allera, CEO of BT Consumer, hinted that focussing on EE would help the company branch out into areas beyond its core connectivity roots. We saw the first evidence of this in October; first, through an announcement of dedicated gaming bundles, and soon after through partnerships with Verisure and Norton on home security and cybersecurity.
Operators Keen to Cash In on the Metaverse
The metaverse remains a mostly nebulous term, but some operators sensed an opportunity in 2022 to take an early leadership.
SK Telecom is among the most bullish here. Having launched its Ifland platform in its home market of South Korea in 2021, this year it expanded it to about 50 international markets. In November, the operator confirmed Singtel as its main metaverse partner for south-east Asia.
Among European operators, Telefonica hosted a metaverse day in October, during which it updated analysts on various acquisitions, alliances and innovations. Meanwhile, Orange Spain opened a store in the metaverse where customers are served by a sales representative in the form of an avatar.
Satellite-Direct-to-Phone Market Turns Heads
This year, CCS Insight has closely tracked the progress of US provider AST SpaceMobile, which is developing what it says is the first space-based cellular broadband network accessible directly by standard mobile phones in use today (see Space Shot). The company’s biggest news this year was the launch of its BlueWalker 3 test satellite in October.
Around the same time, T-Mobile US confirmed a partnership with SpaceX to offer satellite connectivity directly to mobile phones using the T-Mobile network. And just weeks later, Apple outlined a service to send emergency messages by satellite from its latest iPhone 14 series (see Instant Insight: Apple Unveils Strong Portfolio Update to Keep Pressure on Rivals). Other smartphone brands, namely Huawei and Bullitt, have made similar moves.
E-SIM in the Spotlight
The concept of an e-SIM has been around for more than a decade, but implementation has been dragged by resistance among mobile providers to support the technology.
This is all set to change following Apple’s recent announcement of an e-SIM-only iPhone for the US. I expect the move to trigger radical long-term changes in customers’ purchasing behaviour and eventually rewrite the way people use their devices and engage with operators.
Although not the first smartphone-maker to support e-SIM, Apple’s huge sales volumes means this must surely be the tipping point for the technology. If the move is successful in the US, expect Apple to take the approach to advanced markets in Europe and beyond with future models.
An Insight Report evaluating Apple’s move and its impact for consumers will be published in the coming weeks. Non-customers can contact CCS Insight for how to obtain a copy.
Dish Network Finally Launches Commercial 5G Network
The long-awaited service initially went live in Las Vegas in May. A few weeks later, the carrier met its deadline to cover 20% of the US population with service availability in over 120 cities. The launch was hotly anticipated as it’s based on Open RAN technology, with much of the functionality running on Amazon Web Services platforms.
Environment High on the Agenda
Back at MWC in Barcelona this February, protecting the planet was a major focus on operators’ exhibition stands. Indeed, Vodafone dedicated almost its entire floorspace to the topic. For more, see Insight Report: MWC 2022: Network Operators.
Throughout the year, we have heard about countless efforts to fight climate change. These include use of renewable energy sources, refurbishment of network infrastructure, deployment of self-powering mobile masts, using artificial intelligence to better manage energy use, encouraging use of second-hand devices and decommissioning older technologies and networks.
Although much effort centres on networks and operations, I believe operators can also incorporate sustainability into service plans (see Insight Report: Sustainability Helps Operators Differentiate Service Plans). This would support greater awareness of environmental issues among customers.
Help for Customers amid Cost-of-Living Concerns
Amid soaring inflation, some operators launched tariffs to help people on a low income. In the UK, examples include BT’s Home Essentials and Virgin Media O2’s Essential Broadband.
However, regulator Ofcom recently said that 29% of customers, or 8 million households, are struggling to pay their bills. It pointed out that although take-up of these broadband social tariffs has more than doubled in the past six months — rising from 55,000 to 136,000 — only 3% of eligible households have signed up. It called for more operators to offer social tariffs and for those that do to promote them more effectively.
Feel free to share your thoughts on my top stories. Are there any I’ve missed that would make it into your top 10?
Happy holidays and stay tuned for another busy year in 2023!
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