12 telecoms industry predictions for 2015

Tis the season to be prognosticating so here’s a selection of the telecoms and mobile industry predictions that have found their way into the Telecoms.com inbox and also one of our own. 2015 should be another very busy year for the telecoms sector.

1.       Facebook launches a payment platform for the youth

Facebook will democratize mobile payments by enabling its user base to make payments to each other using the Facebook Messenger platform, or to buy products marketed or advertised via Facebook. How exactly what Facebook is planning to integrate payments into its existing services remains uncertain. However, Facebook has hired PayPal president, David Marcus, as VP of Messaging Products, which should help the company launch a competitive offering. While older age groups (with money) will be wary of providing payment credentials to Facebook, younger age groups view Facebook in a more positive light.

Strategy Analytics

2.       WiFi calling on the rise as market evolves

WiFi has become a critical component of some carriers’ business models as they use the technology to offload traffic from their congested networks. However, WiFi’s availability is also opening the door to new competitors using unlicensed spectrum to challenge carriers’ services that are delivered over licensed airwaves. WiFi’s market impact will evolve during 2015 on multiple fronts, including a broader adoption of WiFi calling.

Current Analysis

3.       Operators’ focus will return to securing the network core, as privacy concerns converge with security

Undoubtedly one of the biggest security stories of the year was the Edward Snowden leaks which firmly brought core network surveillance into the spotlight. The line between what represents an invasion of privacy and national security is blurred in the minds of most consumers. Mobile operators are coming under increasing scrutiny and consumers are starting to ask valid questions regarding their privacy. In 2015, we expect to see much greater focus on the part of MNOs in securing their own networks to deliver this reassurance to their subscribers.

Adaptive Mobile

4.       Chinese brands have increasing impact on smartphone UX trends

In 2015, Chinese OEMs are likely to launch more premium designed mobile devices that utilize differentiating materials or form factors to capture more consumer attention. This will push established OEMs to also deliver innovation in industrial design. Creative features and services that could improve the media and social experiences on the move are most likely to attract Chinese consumers, while features that bring better interaction experience on a large screen device will be critical. A more complete eco-system that covers devices across all screen sizes, from wearbles (2-inch) mobile devices (4-5”), tablets (7-9”) and televisions (40-60”), and that interact with smart home technology will help Chinese OEMs to establish their brand presence and build up their consumer loyalty. Top Chinese brands are moving rapidly from followers to innovators.

Strategy Analytics

5.       Wearables and the connected home

Wearable tech is huge right now but, towards the end of 2015, we will be seeing the first real examples of wearables interconnecting with smart home devices, to enable users to personalise their home – so music follows them into every room they enter or lights turn on based on the homeowner’s preferences.

Deutsche Telekom

6.       IoT in 2015: An evolution from connected toothbrushes and Fitbits to Industrial data

In 2015, Splunk expects to see the conversation around IoT extend beyond consumer devices to the disruption this will cause in traditional ‘bricks & mortar’ industries like building, manufacturing and transportation. Ultimately the driving force behind IoT will be the value of the data produced from connected devices. Organisations will be looking at how that data can be used in real-time “business moments”. For example, manufacturing is an area that is increasingly benefitting from the combination of IoT and big data. By linking up sensors and robotics to automate processes, manufactures are becoming more efficient while also generating a massive amount of ‘machine data’ which can be indexed, monitored and analysed to provide real time problem solving, machine health monitoring and costs avoidance.  Intel implemented this combination in its manufacturing facility in Malaysia with a view to improving productivity. By incorporating predictive machine health to reduce component failure, the pilot optimised the process to realise savings of $9 million.

Splunk

7.       The streamed future

Media use patterns are globalizing. Viewers are shifting towards easy-to-use on-demand services that allow cross-platform access to video content. 2015 will be historic as more people will watch streamed video on a weekly basis than broadcast TV.

Ericsson

8.       2015 – The year of NFC, at last

For several years now, NFC has been ‘the next big thing’ in payments. Finally, it may now be in a position to justify the hype. Notwithstanding the continuing reluctance of a number of US retailers to engage with NFC, we believe that the combination of Apple Pay and HCE (Host Card Emulation) should provide substantial impetus for NFC payments.

Apple Pay’s combination of proximity and remote purchase capability should mean that usage of one cross-promotes the other. Meanwhile, the arrival of a model whereby the secure element no longer resides on the SIM card but instead is remote to the handset removes the necessity for MNO (Mobile Network Operator) involvement, making NFC more attractive to banks.

In the US, Tim Cook has already confirmed that more than 1 million credit cards were activated on Apple Pay within 3 days of its going live in the US; in Europe, the first banks have now launched commercial HCE-based NFC services. The initial omens are good: expect to see substantial consumer adoption by the end of 2015.

Juniper Research

9.       LTE Small Cells slowdown, while LTE-U picks up pace

The LTE Small Cell market will continue to develop very slowly as the industry struggles with business model issues around who pays for indoor deployments. Most of the excitement around LTE small cells has focused on the indoor market as that is where the people are, but the economics point toward venues having to pay for these deployments.  That seems unlikely without a neutral host LTE small cell. LTE in the unlicensed bands (aka LTE-U) generated lots of discussion in 2014. The technology will be a success IF 3GPP implements Listen-Before-Talk so as to be a good neighbour for Wi-Fi. 2015 will see significant progress in this direction.

Ruckus Wireless

10.   The move to soft SIMs gathers speed

Northstream has historically been outspoken about operators’ need to reduce their dependency on legacy processes, systems and technologies. SIM cards are no exception. 2015 will be the year when the business case for operators to abandon SIM cards and move to soft SIM technology becomes impossible to ignore. The accelerating number of IoT installations with specialised SIM specifications, the cost-savings for operators, plus growing end-user demand for greater flexibility, will encourage the industry to widely adopt a soft SIM solution.

Northstream

11.   More than 20 European operators launch commercial VoLTE services in 2015

The rash of launches is driven by a desire to improve network efficiency and generate cost savings rather than find new sources of revenue. A greater range of supporting devices including the iPhone 6 boosts early adoption. Operators quickly realise that they have underinvested in voice call quality and in parallel many launch voice-over-Wi-Fi services to tackle the challenges of poor indoor coverage. VoLTE finds favour among business customers, paving the way for the introduction of a range of new applications such as high-quality video conferencing.

CCS Insight

12.   3rd smartphone business model will establish itself

The smartphone industry is currently dominated by two business models: Apple’s of using unique software and ecosystem to drive hardware margin, and Google’s of using platform ubiquity to generate internet traffic to sell ads against. All smartphone vendors bar Apple are struggling, and that even includes Samsung, so something’s got to give.

The solution is currently being exemplified by Xiaomi. In a mature handset market margins are inevitably tight, so why not give them up entirely in order to build up an installed base you can then sell mobile software and services to? This approach has vaulted Xiaomi to third place among global smartphone vendors and dramatically increased its value.

Amazon is trying this approach, but while Xiaomi is targeting the mid-market with its competitively-priced handsets Amazon went for the top, and is now sitting on so much unsold stock it’s questionable even its many warehouses can accommodate it. Amazon will launch the Fire Mini, or some such concession to the mid-market, but it will still need to convince consumers to defect from regular Android.

The biggest exponent of the third way will be Microsoft. It clearly gave up on the concept of making money from Windows Phone licenses when it acquired its biggest customer – Nokia Devices. Since then there has been the inevitable period of adjustment, during which Lumia devices haven’t exactly had a renaissance. Microsoft will use the Lumia range as hero products, much as it does Surface for tablets, but expect it to push software and services such as Mobile Office hard across all platforms in 2015.

Telecoms.com