The Future of Broadband: Fixed–Mobile Convergence
The use of mobile broadband services is rapidly increasing. By the end of 2015 there will be 3 billion mobile broadband connections worldwide serving 2.4 billion people. However, this does not mean the future of broadband is mobile. By the end of 2015, 2.6 billion people will still have access to a fixed broadband connection at home, and 1.4 billion will be using both fixed and mobile broadband services. The majority of those customers with both fixed and mobile broadband will reside in the current developed broadband regions of North America, Western Europe, and Asia-Pacific. However, the opportunities for fixed–mobile convergence (FMC) services in emerging markets are still significant and should not be ignored alongside larger-scale mobile broadband deployments.
Executive summary
In a nutshell
Ovum view
Key messages
Mobile broadband will not replace fixed…
…but mobile broadband is an important addition to the fixed portfolio
Broadband convergence is finally on the move
A need to move beyond the bundle
Emerging markets should not dismiss broadband FMC
FMC should not become a dogma
Recommendations for integrated operators
Broadband development increases smart pricing opportunities
In emerging markets, striking a balance between low- and high-end segments will be key
Developed markets also need to find a balance
Look for ways to make bundling pricing more attractive
Now FMC, next multi-screen and extended home
Recommendations for non-integrated operators
The future may not be mobile broadband, but it is mobile
In developed markets you need a developed solution
Broadband FMC definitions
Defining convergence
Defining broadband
Mobile broadband
Fixed broadband
Where fixed and mobile converge
Market forecast
A unique broadband FMC forecast
A complicated market
Regional forecast
A global view shows broadband FMC on the rise
Regional breakdown highlights the importance of fixed next-generation access
Broadband grows up: bundling, pricing, and marketing broadband
Broadband is driving increased product and package diversity
Broadband affordability: basic plus “x”
Fixed broadband only is the exception rather than the rule
Is quality becoming more important?
Quality is becoming a more important benchmark
Bundling goes from strength to strength
Broadband underpins increased service bundling
The level and variety of bundling continues to increase
Markets show significant variation
The final element: mobile broadband impacts
Regulation easing, but complexity requires a watchful eye
Bundling drivers
Incremental revenue growth has the edge on cannibalization… for now
Less innovative service opportunity; more market-share grab
A valuable tool for churn reduction
The downside? It’s more about practical barriers
Selling broadband: the mobile premium
Big-screen mobile broadband: the rise of “unlimited” tariffs
Fixed broadband: more commoditization and a channel for bandwidth-hungry services
Expanding the possibilities of access-based service and marketing
Hub/modem innovation
Multi-user mobile and/or fixed broadband
Service/usage-orientated marketing
Building on broadband: next steps
Broadband’s pole position
Significant geographic idiosyncrasies
The battle against access commoditization
Network quality is a hard sell
Unified access and services: can telcos exploit the opportunity?
The right positioning: finding the balance
Consumer trends in applications and devices
Uptake of wireless devices continues to increase
Wireless does not always mean mobile
More personal devices means more personal content
Mobile usage still lags behind fixed
Technology issues
The drive for greater bandwidths
The spread of FTTx
The rise of LTE
Mobile broadband will not outpace fixed
The role of Wi-Fi
Wi-Fi access coverage continues to increase
Wi-Fi-enabled handsets become increasingly common
Putting the two together can pay dividends
Appendix
Further reading
Methodology
In a nutshell
Ovum view
Key messages
Mobile broadband will not replace fixed…
…but mobile broadband is an important addition to the fixed portfolio
Broadband convergence is finally on the move
A need to move beyond the bundle
Emerging markets should not dismiss broadband FMC
FMC should not become a dogma
Recommendations for integrated operators
Broadband development increases smart pricing opportunities
In emerging markets, striking a balance between low- and high-end segments will be key
Developed markets also need to find a balance
Look for ways to make bundling pricing more attractive
Now FMC, next multi-screen and extended home
Recommendations for non-integrated operators
The future may not be mobile broadband, but it is mobile
In developed markets you need a developed solution
Broadband FMC definitions
Defining convergence
Defining broadband
Mobile broadband
Fixed broadband
Where fixed and mobile converge
Market forecast
A unique broadband FMC forecast
A complicated market
Regional forecast
A global view shows broadband FMC on the rise
Regional breakdown highlights the importance of fixed next-generation access
Broadband grows up: bundling, pricing, and marketing broadband
Broadband is driving increased product and package diversity
Broadband affordability: basic plus “x”
Fixed broadband only is the exception rather than the rule
Is quality becoming more important?
Quality is becoming a more important benchmark
Bundling goes from strength to strength
Broadband underpins increased service bundling
The level and variety of bundling continues to increase
Markets show significant variation
The final element: mobile broadband impacts
Regulation easing, but complexity requires a watchful eye
Bundling drivers
Incremental revenue growth has the edge on cannibalization… for now
Less innovative service opportunity; more market-share grab
A valuable tool for churn reduction
The downside? It’s more about practical barriers
Selling broadband: the mobile premium
Big-screen mobile broadband: the rise of “unlimited” tariffs
Fixed broadband: more commoditization and a channel for bandwidth-hungry services
Expanding the possibilities of access-based service and marketing
Hub/modem innovation
Multi-user mobile and/or fixed broadband
Service/usage-orientated marketing
Building on broadband: next steps
Broadband’s pole position
Significant geographic idiosyncrasies
The battle against access commoditization
Network quality is a hard sell
Unified access and services: can telcos exploit the opportunity?
The right positioning: finding the balance
Consumer trends in applications and devices
Uptake of wireless devices continues to increase
Wireless does not always mean mobile
More personal devices means more personal content
Mobile usage still lags behind fixed
Technology issues
The drive for greater bandwidths
The spread of FTTx
The rise of LTE
Mobile broadband will not outpace fixed
The role of Wi-Fi
Wi-Fi access coverage continues to increase
Wi-Fi-enabled handsets become increasingly common
Putting the two together can pay dividends
Appendix
Further reading
Methodology
LIST OF TABLES
Table 1: Basic broadband tariff examples
Table 2: Basic quad-play offers
Table 3: Approximate churn rates of x-play services in the UK
Table 4: Small-screen mobile broadband tariffs
Table 5: Mobile broadband tariffs by monthly subscription, highest to lowest
Table 6: A selection of fixed high-speed broadband tariffs
Table 7: The need for higher speeds
Table 1: Basic broadband tariff examples
Table 2: Basic quad-play offers
Table 3: Approximate churn rates of x-play services in the UK
Table 4: Small-screen mobile broadband tariffs
Table 5: Mobile broadband tariffs by monthly subscription, highest to lowest
Table 6: A selection of fixed high-speed broadband tariffs
Table 7: The need for higher speeds
LIST OF FIGURES
Figure 1: The different levels of convergence
Figure 2: Broadband market segmentation
Figure 3: Broadband market segmentation forecast for India
Figure 4: Broadband market segmentation forecast for Italy
Figure 5: Broadband market segmentation forecast for Korea
Figure 6: Forecast of the number of broadband users by access technology globally, 2010–15
Figure 7: Forecast of the number of people with access to mobile and fixed broadband by region, 2010–15
Figure 8: Forecast of the proportion of broadband users with access to both mobile and fixed broadband by region, 2010–15
Figure 9: Multiple forms of bundling: broadband is the centrifugal force
Figure 10: Percentage of people buying communication bundles in the UK, June 2010
Figure 11: Different bundling combinations bought by Dutch households from 2007 to 2010
Figure 12: Development of different bundled combinations bought by Swedish households
Figure 13: Orange’s quad-play marketing
Figure 14: ARPU versus average number of services per customer
Figure 15: Pricing/segmentation scenario for broadband in most developed markets
Figure 16: Pricing/segmentation scenario in emerging markets with low fixed-line density
Figure 17: Mapping of telco activities in the consumer market
Figure 18: The percentage of people who access the Internet by device type, UK (June 2010)
Figure 19: Penetration of Internet access by device, Korea (2009)
Figure 20: Fixed broadband subscribers from 2006–10, Korea
Figure 21: Penetration of Internet access by location, Korea
Figure 22: Which device people prefer for specific applications, UK
Figure 23: Which device 16–24 year olds prefer for specific applications, UK
Figure 24: Which applications people access on popular connected devices, UK
Figure 25: Average broadband usage, mobile versus fixed
Figure 26: xDSL to FTTH evolution path
Figure 27: Example fixed broadband services by speed
Figure 28: 3GPP technologies’ evolution path
Figure 29: UK mobile broadband speed benchmark
Figure 30: Wi-Fi capability by smartphone platform
Figure 1: The different levels of convergence
Figure 2: Broadband market segmentation
Figure 3: Broadband market segmentation forecast for India
Figure 4: Broadband market segmentation forecast for Italy
Figure 5: Broadband market segmentation forecast for Korea
Figure 6: Forecast of the number of broadband users by access technology globally, 2010–15
Figure 7: Forecast of the number of people with access to mobile and fixed broadband by region, 2010–15
Figure 8: Forecast of the proportion of broadband users with access to both mobile and fixed broadband by region, 2010–15
Figure 9: Multiple forms of bundling: broadband is the centrifugal force
Figure 10: Percentage of people buying communication bundles in the UK, June 2010
Figure 11: Different bundling combinations bought by Dutch households from 2007 to 2010
Figure 12: Development of different bundled combinations bought by Swedish households
Figure 13: Orange’s quad-play marketing
Figure 14: ARPU versus average number of services per customer
Figure 15: Pricing/segmentation scenario for broadband in most developed markets
Figure 16: Pricing/segmentation scenario in emerging markets with low fixed-line density
Figure 17: Mapping of telco activities in the consumer market
Figure 18: The percentage of people who access the Internet by device type, UK (June 2010)
Figure 19: Penetration of Internet access by device, Korea (2009)
Figure 20: Fixed broadband subscribers from 2006–10, Korea
Figure 21: Penetration of Internet access by location, Korea
Figure 22: Which device people prefer for specific applications, UK
Figure 23: Which device 16–24 year olds prefer for specific applications, UK
Figure 24: Which applications people access on popular connected devices, UK
Figure 25: Average broadband usage, mobile versus fixed
Figure 26: xDSL to FTTH evolution path
Figure 27: Example fixed broadband services by speed
Figure 28: 3GPP technologies’ evolution path
Figure 29: UK mobile broadband speed benchmark
Figure 30: Wi-Fi capability by smartphone platform
