Network Performance. Trends and challenges for the mobile broadband in LATAM Region. Facundo Fernandez Begni - Ericsson

Transcription

1 Network Performance Trends and challenges for the mobile broadband in LATAM Region. XIII Cumbre REGULATEL-BEREC Desafíos de Internet y retos reguladores Buenos aires, ARGENTINA / July 2014 Facundo Fernandez Begni - Ericsson

2 Content of presentation 1 Background and introduction: Network Society / Mobility Report 2 ConsumerLab, Global studies: Network Performance & Value of Network Performance 3 Conclusions

3 In the networked society people, knowledge, devices, and information are networked for the growth of society, life and business.

4 Mobile subscriptions Q

5 5.6 Billion smartphone Subscriptions end B smartphone subscriptions by the end of % of phones sold during Q1 were smartphones By 2019 the average smartphone subscription will use 2.5 GB of data per month Public Ericsson AB Page 5

6 9.2 billion Mobile subscriptions end 2019 LTE is now growing strongly, with 35 million new subscriptions added in Q LTE reached 240 million subscriptions in Q LTE to reach 2.6 billion subscriptions by 2019 WCDMA/HSPA added around 70 million new subscribers, i.e. 2X more than LTE in Q LATAM 2013: Mobile subscriptions by technology, Penetration 118% Subscriptions 720 M Prepaid 79% Smartphone penetration 20% 923 m SUbsCRIPCIONs latam % PENETRAtion latam 2018 M2M subscriptions not included

7 10 times Mobile data Traffic by end of 2019 Monthly consumption per device type Global mobile traffic: voice and data GB 13 GB 1.4 GB 6.3 GB 0.65 GB 2.5 GB

8 Mobile application Traffic outlook, 2013 and 2018

9 population Coverage Around 90% of world s population covered by WCDMA/HSPA in 2019 LTE network deployments continue in all regions of the world, as LTE population coverage doubled in 2012 compared to 2011 (10% vs. 5%) More than 65% of world s population covered by LTE in 2019

10 10 HOT CONSUMER TRENDS 2014 Ericsson AB Page 10

11 Content of presentation 1 Background and introduction: Network Society / Mobility Report 2 ConsumerLab, Global studies: Network Performance & Value of Network Performance 3 Conclusions

12 NETWORK Performance Keeping Smartphone users loyal

13 Consumer survey details Smartphone owners who use web browser or applications to access content and services on the Internet at least once a week. 20 minute interview. Survey details (Jan 2013) US, Mexico, Chile, Brazil, UK, Sweden, Russia, Turkey, China, Japan, South Korea, Indonesia 1000 online interviews per market age 18-69

14 Telecom struggles Telecommunications trails behind other industries in brand loyalty/net Promoter Score (NPS) NPS Benchmarks for US Industry groups Satmetrix 2012 net promoter benchmark study Retailing Online services Technology Travel/Hospitality Financial services Insurance Telecommunications How likely you are to recommend your operator to a friend, family or colleague Scale: 0-10 Net Promoter Score (NPS) = % of Promoters (9-10) - % of Detractors (0-6)

15 Customer experience Customer Relation Initial Purchase Billing & Payment Account Management Service & Support Loyalty building Service Usage Network & Service Performance Tariff plans/ Offers Smartphone Apps/Eco system Source: Ericsson ConsumerLab

16 what drives loyalty in latam? Network performance and Value for money are the key drivers of operator recommendation Shapley regression analysis, showing the relative impact between each driver and loyalty to operator brand (NPS) Customer service Offer Marketing Network Source: Ericsson ConsumerLab Network Performance Study 2013 Base: Smartphone users in BR, CHN, INDO, SK, JP, US, UK, SE, RU, TUR, CHL, MX Base: Smartphone users in BR, CHL, MX

17 Satisfaction Latam overall: network performance advocacy Data Reliability is the key factor that drives network performance advocacy, followed by Voice quality Derived importance: Sustain Strengths Concern? Areas to focus Voice Data Derived importance Source: Network Performance study 2013 Base: Latam Smartphone users

18 Satisfaction Latam: network performance advocacy by location Data Coverage Outdoors and Transport are areas to focus on as importance is high but rates low on satisfaction Indoor Outdoor Transport Densely Populated Sustain Strengths Voice Quality Data coverage Data Speed Concern? Areas to focus Derived importance Source: Network Performance study 2013 Base: Latam Smartphone users

19 The value of performance Capital investment in network quality leads to improved financial performance

20 In the mobile data era, Some operators are growing faster Percent of 2Q07 levels 190% 180% 170% 160% Best in class revenue growth Competitors revenue growth 150% 140% 130% 120% 110% 100% 90% CAGR % 2.6% 80% 2Q Source : Ericsson analysis operator reporting (12 leading operators) *) Compound Annual Growth Rate based on analyzed operators development Figures have been adjusted for inflation per country.

21 Performance drives revenue growth Highly performing operators have a quality-driven investment strategy Lead by Superior Network Performance Lead by Innovative Marketing & Offering and leverage performance to drive revenue by innovative market initiatives

22 Overview of study The econometric analysis underlying the simulation model and the case studies support the concept that investment in network performance yields superior market and financial benefits a) Statistical analysis (3 years of history) c) Validation through case studies Latin American country 1 Latin American country 2 North American country North American operator Latin American operator b) Simulation model (projections) European operator Latin American operator 1 Latin American operator 2 North American operator Asian operator

23 Statistical model Model aimed at defining the causal relationship from capital expenditures to financial performance Capital expenditures Operational performance Market performance Financial performance Capacity upgrades Accessibility & data completion rate Market Share Revenues Percent connections higher than 1 Mbps Network modernization Speech call quality index ARPU increase EBITDA Latency reduction Product/service development Throughput Churn reduction Free cash flow from operations To find the main drivers of performance the model interlinks the different drivers in each part of the chain

24 To sum up Appropriately targeted capital expenditure leads to improved network performance which translates into better market performance and financial returns Capital expenditures Operational performance Financial performance Market performance Network performance creates new opportunities and bring value to both consumers and operators

25 Content of presentation 1 Background and introduction: Network Society / Mobility Report 2 ConsumerLab, Global studies: Network Performance & Value of Network Performance 3 Conclusions

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