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SUMMARY
Voice continues to be the dominant revenue generator for mobile operators
around the world and there are still substantial opportunities to grow mobile
voice usage and revenue. This report presents extensive case studies from
mobile operators around the world, to illustrate the characteristics of
successful prepaid and postpaid voice tariffs, home zone tariffs, services and
promotions to stimulate usage and substitute for fixed services. The report is
an essential reference for every mobile operator and provides fixed operators
with an insight into the competitive threat they face.
Accelerating Fixed--Mobile Substitution: detailed operator case studies
answers your key questions:
- How can prepaid tariffs be used to stimulate voice usage and encourage
fixed--mobile substitution?
- What tactics can be used to encourage customers to migrate from prepaid to
contract tariffs?
- What are the winning characteristics of contract tariffs designed to
maximise voice usage and ARPU and attract fixed users?
- When are home zone services appropriate and what are the key features of a
successful offering?
- How can other services be used to increase the value of mobile voice and
increase usage?
- How should marketing be used to increase fixed--mobile substitution?
TABLE OF CONTENTS
- 1 Fixed--mobile substitution is a major opportunity
- 1.1 Mobile voice telephony has substantial growth potential and
fixed--mobile substitution can be an attractive strategy
- 1.2 Cultivation of mobile voice usage is a key factor in achieving
fixed--mobile substitution
- 1.3 Six mobile operator case studies illustrate a variety of tactics to
drive voice usage and achieve fixed substitution
- 2 TIM is driving mobile voice usage with prepaid tariffs
- 2.1 TIM is the leading mobile operator in Italy and, until 2005,
operated independently of fixed operator Telecom Italia
- 2.2 TIM has achieved good levels of ARPU with its prepaid tariffs
- 2.3 TIM applies a wide variety of techniques to encourage prepaid
customers to make voice calls
- 2.4 TIM is using value-added services to increase the appeal of mobile
voice services compared to fixed
- 2.5 TIM could achieve more by focusing explicitly on fixed--mobile
substitution and exploiting the capacity of 3G
- 3 Telefónica Móviles has migrated many prepaid customers to contracts to
stimulate voice usage
- 3.1 Telefónica Móviles is the mobile market leader in Spain, where
substantial fixed--mobile substitution has occurred
- 3.2 Telefónica Móviles has been the most successful operator in
migrating prepaid customers to contracts
- 3.3 Migration has helped to achieve increases of 28% in ARPU and 44% in
usage as fixed voice usage has fallen
- 3.4 Contract tariffs have been redesigned to highlight their value for
money compared with prepaid and to stimulate calls
- 3.5 Enticing customers from prepaid to contract has required
significant focus and promotional effort
- 4 Sprint Nextel achieves the highest voice usage levels in the world
- 4.1 Sprint Nextel is one of the leading US mobile operators and,
despite plans for converged services, is driving mobile voice
- 4.2 Sprint PCS has consistently led voice usage and ARPU in the
heavy-usage US market
- 4.3 Sprint Nextel's contract plans encourage high usage of mobile voice
and lead to fixed--mobile substitution
- 4.4 Sprint Nextel has cultivated a broad spectrum of MVNOs, to help it
grow voice usage across all segments
- 4.5 Sprint Nextel push-to-talk services extend the gap between mobile
and fixed voice services
- 5 3 UK encourages voice usage with simple contract and prepaid bundles
- 5.1 3 has the largest number of 3G customers in the UK, where
fixed--mobile substitution still has some way to go
- 5.2 3 has exploited the capacity of its 3G network by encouraging high
levels of voice usage
- 5.3 3 focuses on simple any time, any network bundled tariffs
- 5.4 3 replicates the structure of its contract bundles in its prepaid
tariffs in order to attract high-value customers
- 5.5 3 could enhance its voice revenue by putting more emphasis on
opportunities for fixed--mobile substitution
- 6 O2 was an early mover in fixed--mobile substitution, using home zone
services
- 6.1 O2 is the smallest mobile operator in the German market, where
fixed--mobile substitution is very low
- 6.2 Genion has been central to O2 achieving the highest ARPU of all
German mobile operators
- 6.3 Genion allows O2 to offer call prices similar to fixed rates
- 6.4 The Surf@home service has been introduced to overcome a key
weakness of Genion
- 6.5 Service and device developments will further enhance Genion and
Surf@home
- 7 Vodafone Germany is now aggressively targeting fixed--mobile
substitution
- 7.1 Vodafone is a leading operator in Germany, where average mobile
voice usage and ARPU are very low
- 7.2 Vodafone is responding to low and declining mobile voice ARPU in
Germany by focusing on fixed--mobile substitution
- 7.3 Vodafone introduced bundled minute plans in 2004
- 7.4 Vodafone's original home zone voice service did not operate outside
the home zone
- 7.5 An enhanced home zone voice was launched in October 2005
- 7.6 Vodafone has also launched a home zone Web service, based on its 3G
datacard, but is taking a risk with the pricing
- 8 Mobile operators must take a position on fixed--mobile substitution
- 8.1 With a compelling case for fixed--mobile substitution, mobile-only
operators will lead the assault on fixed networks
- 8.2 While integrated operators can offer fixed Internet access, a
fixed--mobile substitution strategy may be harder to define
- 8.3 Beyond individual services, fixed--mobile substitution will demand
the right environment
Actions
List of Figures and Tables
- Figure 1.1 Split of outgoing voice minutes between fixed and mobile
networks in selected countries in 2004
- Figure 1.2 Relationship between mobile voice usage and the proportion of
total voice traffic on mobile networks, 2004
- Table 1.1 Case studies demonstrating a variety of approaches to the
encouragement of fixed--mobile substitution
- Table 2.1 Statistics of Italian mobile operators at 31 March 2005
- Table 2.2 Outgoing voice minutes and spend for fixed and mobile services
in Italy, 2004
- Table 2.3 Proportion of prepaid customers and annual ARPU for selected
operators, June 2005
- Figure 2.1 Annual ARPU and average monthly voice usage for TIM, 2001--4
- Table 2.4 Prepaid tariffs offered by TIM in Italy, October 2005
- Table 3.1 Statistics of Spanish mobile operators at 30 June 2005
- Table 3.2 Outgoing voice minutes and spend for fixed and mobile services
in Spain, 2004
- Table 3.3 Proportion of prepaid customers for selected Western European
operators, December 2001 to June 2005
- Figure 3.1 Growth in voice ARPU and total ARPU for Telefónica Móviles
(Spain), December 2002 to June 2005
- Figure 3.2 Growth in average monthly voice usage for Telefónica Móviles
(Spain), December 2002 to June 2005
- Table 3.4 Contract tariffs from Telefónica Móviles in Spain, October 2005
- Table 3.5 Prepaid tariffs from Telefónica Móviles in Spain, October 2005
- Table 4.1 Statistics of the leading US mobile operators at 31 March 2005
- Figure 4.1 Voice usage and ARPU of selected US and European operators,
year to 30 June 2005
- Figure 4.2 Average monthly voice usage per user for the leading US
operators, first quarter 2003 to second quarter 2005
- Table 4.2 Sprint PCS Fair & Flexible Plans, October 2005
- Table 4.3 Sprint PCS Fair & Flexible America Plans for voice, October 2005
- Table 4.4 Examples of MVNOs offering prepaid services hosted by Sprint
Nextel
- Table 4.5 High-usage prepaid voice plans from Liberty Wireless, October
2005
- Table 5.1 Statistics of UK mobile operators at 30 June 2005
- Table 5.2 Outgoing voice minutes and spend for fixed and mobile services
in the UK, 2004
- Figure 5.1 Growth in customers of 3 UK, 2003--5
- Table 5.3 Contract tariffs offered by 3 UK, October 2005
- Figure 5.2 Comparison of any time, any network voice minutes bundled into
contract tariffs by UK mobile operators, October 2005
- Table 5.4 ThreePay prepaid tariffs offered by 3 UK, October 2005
- Table 6.1 Statistics of German mobile operators at 30 June 2005
- Table 6.2 Outgoing voice minutes and spend for fixed and mobile services
in Germany, 2004
- Figure 6.1 Growth in O2 and Genion customer bases, 2001--5
- Table 6.3 Comparison of ARPU for German mobile operators, year to June 2005
- Table 6.4 Pricing of O2 Germany's Genion service, October 2005
- Table 6.5 Surf@home tariffs, October 2005
- Table 6.6 Cost to users and revenue per Mbyte of O2 Surf@home
- Table 7.1 Statistics of German mobile operators at 30 June 2005
- Table 7.2 Outgoing voice minutes and spend for fixed and mobile services
in Germany, 2004
- Figure 7.1 ARPU for Vodafone operators in Western Europe and Japan, year
to June 2005
- Table 7.3 Statistics for Vodafone Germany, December 2003 to June 2005
- Table 7.4 Zuhause Web tariff, October 2005
- Figure 7.2 Comparison of prices for Vodafone's Zuhause Web and O2's
Surf@home services
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