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Thursday, October 20, 2005

The Burning Platform that makes IMS critical

A colleague at our IMS consulting practice (see http://www.stlpartners.com/) was speaking with a senior marketing planner at a major mobile operator this week. He confirmed that IMS is still very much a 'technology programme' at present. The opportunities it brings had not yet filtered through to the marketing department. They were still only looking at products they could launch within 12 months, using the current silo'd technology platforms.

New research from Telegeography (see below) shows the 'burning platform' of delcining ARPU that wireless operators face.

This fits with our consulting assignments with operators who have been shielded from the ARPU decline by growth in subs. Another colleague tells me that this was a central point of debate at one of his fixed line clients yesterday, with only one OpCo claiming any improved ARPU (which, when analysed, was pure fantasy anyway). This trend is set to continue, but penetration in many markets is tailing off (and the ARPU decline will be all the clearer).

So, operators need to:
1. Increase ARPUs (or at least slow down the rate of decline) through new services
2. Reduce costs (because new services will incur new costs).

Either way, Operators better get going on IMS quicker than they are already. That means involving the marketing and operations functions much more closely in the planning process now. Let's move it out of the network architect's office.

In October's IMS Insider report we describe in detail which IMS-type services will be the most effective to stave off ARPU decline, and a rigorous framework for prioritising these (and other) multimedia services. We also describe a deployment framework showing what is required to get these services launched. To subscribe to IMS Insider, please go to http://www.ims-insider.com/. (We have a special offer of 25% in October).

From Cellular News, 20th Oct, 2005 http://www.stlpartners.com/exchweb/bin/redir.asp?URL=http://www.cellular-news.com/story/14479.php
Quarterly Wireless ARPU Down Worldwide

Although global wireless subscribers and revenues continue to grow, mobile operators are seeing less and less revenue per user. TeleGeography's latest GlobalComms update shows wireless average revenue per user (ARPU) is declining worldwide, with only North American and Western European companies near their Q2 2004 levels. Eastern Europe was the biggest loser, down more than 27%, followed by Asia-Pacific and Africa, down 18% and 12% respectively. Global ARPU was down 13%.

Sample North American and Western European company ARPUs:

T-Mobile USA: $54 (Q2 2005) / $42 (Q2 2004)
U.S. Cellular: $44.50 / $47.80
T-Mobile Netherlands: $44.50 / $44.70
Telenor Mobil: $47.50 / $51.60

Sample ARPUs for the rest of the world:

NTT DoCoMo: $60.40 (Q2 2005) / $68.40 (Q2 2004)
Vodafone Australia: $37.70 / $44.20
Unefon (Mexico): $18.80 / $20.80

Will 3G Save Wireless Revenue?While ARPU continues to decline across the board for wireless providers, some 3G operations are beginning to report ARPUs much higher than regional averages. For example, Hutchison 3G UK reported 2Q ARPU of US$62 (compared to US$37.40 average for Western Europe), and its sister Hutchison 3G Australia reported US$61.80 (compared to US$18.90 for Asia-Pacific). Depending on the take up rate and price stability of 3G, global ARPU may see better days ahead.

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