END OF YEAR REPORT SPONSORED BY: INSIDE THIS REPORT: 20 Annual survey results : 4G LTE, Wi-Fi, small cells and NFV to the fore

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1 END OF YEAR REPORT SPONSORED BY: INSIDE THIS REPORT: 20 Annual survey results : 4G LTE, Wi-Fi, small cells and NFV to the fore 31 March of the smartphone continues as do tech teething problems : LTE-A, VoLTe and wearable devices begin to make their mark

2 Annual survey results Every year, Mobile Europe s survey uses its readers as a lightening rod for wireless technology s big questions. Here are the results of our fourth annual report Which technology has had the most disruptive impact on mobile operators in 2013? respondents Cloud RAN 14% 4G LTE 63% Operator respondents Big data 19% Big data 15% 4G LTE 60% J ustifiably, 2013 could be described as the year that 4G LTE really took off in Europe as a steady stream of launches occurred throughout. Therefore, it is not surprising that the fourth generation technology takes top spot as the most disruptive this year. Both operators and the wider industry agree with 4G LTE s preeminent position and that of big data as next on the technology to-do list. There after, however, opinions diverge slightly with operators suggesting m-payments have been most disruptive but all respondents leaning more towards cloud RAN. It is interesting to note the comparatively few respondents who view Wi-Fi as one of the most disruptive technologies it was chosen by just 10 percent of operators and seven percent of all respondents. MOST INNOVATIVE OPERATOR IN 2013? M-payments 15% Vodafone gained the most votes for the operator that has implemented the best technology innovation this year. The UK-based MNO gained 20 percent of the vote of all respondents to our survey, who cited a range of innovations that they viewed worthy of highlighting. These included Vodafone s 4G LTE network and the use of carrier aggregation as well as a secure SIM, cloud PBX and the recently launched mobile wallet. 20 Mobile mobileeurope.co.uk

3 Which technology will have the most disruptive impact on mobile operators in 2014? 4G LTE 44% 4G LTE 55% Big data 19% Wi-Fi 19% Wi-Fi 25% LTE-A and Small cells 16% 5G 15% LTE-A 15% Big data 15% 4 G LTE will continue to dominate the mobile technology space in 2014, respondents believe. Over half of operators and 44 percent of all respondents think it will have the most disruptive impact next year. Equally, big data retains its role as the second most disruptive technology amongst all respondents, but operators see Wi-Fi making a much bigger impact next year. respondents expect inaugural LTE-A deployments to disrupt the market, but while operators surprisingly see a role for 5G, all respondents expect small cells to make an impact. Which of the following services are key for operators to offer to their customers in 2014? W hen it comes to which services operators should be offering to their customers next year, there are two clear winners VoLTE and TV/video. VoLTE came out on top amongst all respondents, while TV/video was the number one choice of operators. Both follow on naturally from the launch of 4G LTE. M-payments were mentioned again, but operators also highlighted two other services unified communications-as-a-service and apps that they think they need to focus on. OTT messaging and communications scored just 18 percent of the overall operator vote, suggesting operators are admitting defeat to a large extent in their battle to win this space. VoLTE 50% TV and Video 47% M-payments 42% TV and Video 59% Unified Communications as a Service 47% VoLTE 47% MOST INNOVATIVE VENDOR IN 2013? Ericsson and Samsung received the joint most votes for the vendor that introduced the best technology products this year. Respondents who voted for Ericsson selected its hetnet offering, VoLTE portfolio and Radio Dot solution that s designed to solve the challenges mobile operators face with in-building coverage. Those who selected Samsung highlighted its wearable technologies, its LTE solution and the Galaxy camera. Consumer apps 41% M-payments 41% Mobile mobileeurope.co.uk 21

4 What will be operators top network investment priority in 2014? LTE deployment 72% LTE deployment 82% C ontinued deployment of 4G LTE networks ensures the technology will dominate operators network investments next year. Over eight in 10 operator respondents and seven in 10 total respondents believe this will be the case. However, from there opinions diverge. expect Wi-Fi, backhaul and network security investments to be the next most important, but all respondents chose traffic offload, network sharing and small cells. Such a divergence poses some interesting questions about the conflicting priorities and/ or expectations of the operator and vendor community in particular. Traffic offload 31% Network sharing 28% Small cells 28% Wi-Fi 35% Backhaul 29% Network security 29% What will be mobile operators top priority to limit network costs in 2014? Traffic optimisation and control 45% Network planning and optimisation 40.5% Network sharing 36% A lthough capex is on the rise thanks to 4G LTE deployments, with operator business models continuing to be constrained by a lack of revenue growth CTOs are having to come up with ways to reduce network costs. Both operators and all respondents agree that traffic optimisation and control will be their top priority in this regard, followed by network planning and optimisation, and network sharing. Traffic optimisation and control 58% Network planning and optimisation 42% Network sharing 31.5% 22 Mobile mobileeurope.co.uk

5 What will be operators top IT investment priority in 2014? IT security 41% J Big data & analytics 53% Cloud 44% ust as with the network, there are some interesting divergences of opinion between operators and the wider telecoms community when it comes to IT investment priorities. While a majority of operators view IT security as the number one priority, a majority of all respondents think big data and analytics should be front of mind. put a smaller emphasis on cloud and IPv6, while data centre investment features in the top three priorities across the board. Data centre 35% Data centre 28% Big data & analytics 29.5% IPv6 28% Cloud 29.5% IT security 28% VOX POPS 2013 As part of the annual survey, which featured the responses of 75 people from across the mobile ecosystem, Mobile Europe made a list of statements and asked respondents to rate how strongly or otherwise they agreed with them. Here are the results: 86% of all respondents agree that network performance is the most important customer experience metric 73% of operators believe that it is becoming harder to train and recruit the necessary staff in the mobile tech field. This number falls to 56 percent when all respondents are factored in. 74% of all respondents and 71 percent of operators think small cells have been overhyped by vendors. 69% of operators and 66 percent of all respondents think serving the enterprise market will increasingly become more important than serving the retail market. 81% of operators and 74 percent of all respondents agree that location-based services will be a key revenue driver in the next few years. 100% of operators think there will be increased industry consolidation in the operator community in 2014, while 89.5 percent think the vendor community will also experience increased M&A activity. Mobile mobileeurope.co.uk 23

6 Annual survey extra Alcatel-Lucent asked Mobile Europe to devise an in-depth survey on 4G LTE. Here is a preliminary review of the results Do you agree with the following statement? VoLTE (Voice over LTE) is a viable alternative to keeping 2G /3G for voice. Yes but only when decommissioning 2G 11% Yes but only when decommissioning 3G 17% Yes but only when decommissioning 2G and 3G 26% No 21.5% Maybe 24.5% D espite many LTE launches this year, a majority of the operator respondents (65 percent) said they had not yet deployed a network, perhaps confirming Europe s laggard status versus the rest of the world. Regardless of whether they had or not, when asked to rank the business benefits of deploying an LTE network, the majority said Improving customer experience was the top benefit. Increasing network capacity and coverage were viewed as the least beneficial outcomes from the list provided. As for their concerns over migrating to LTE, capex costs and device availability ranked highest amongst operators. However, when answers from the wider telecoms community were factored in, revenue generation was the biggest concern. A majority (48 percent) of operators do not agree that they should charge a premium for LTE, although a third think operators should charge a 1-5 premium. Sixteen percent said they should charge more than 5. were equally split when it came to the merits of VoLTE. Although over half (54 percent) said it is a viable alternative to keeping 2G /3G for voice, 31 percent were unsure. Fifteen percent said it categorically wasn t an alternative. For those operators who think it is an alternative, a majority (42 percent) said it did not matter when VoLTE is implemented. Just over a third (35 percent) said within 12 months of launching LTE was the ideal time, with just eight percent believing it should be implemented the day LTE is launched. Seventy three percent of operators said no premium should be charged for VoLTE. Meanwhile, over 38 percent of operators said they were looking at deploying VoWiFi and over 15 percent said they were looking at VoHSPA. When it came to implementation, 78 percent of operators (and 75 percent of all respondents) were in agreement that overlay is the best method to deploy LTE. Of those, the majority of operators (37 percent) said lower risk was the principal reason for choosing overlay, followed by speed to market, which was chosen by 32 percent of operator respondents. For those who said overlay was not the best method, the main reasons were equally split (29 percent) between speed to market, lower cost and lower risk amongst operators. However, all respondents cited better interoperability between 2G/3G/4G as the main reason. When selecting a vendor for 4G LTE, 77 percent of operators said it was either critical or important that the vendor had previous experience of LTE roll outs. Over 39 percent of operators said it was very important to improve LTE indoor coverage and capacity, with just four percent saying it is not important for now. Thirteen percent said they preferred to rely on Wi-Fi offload. Further, a majority of operators (43.5 percent) selected indoor coverage as the primary value proposition of LTE small cells ahead of the ability to offer innovative new services based on location and indoor capacity. The main reason for not adopting LTE small cells is the need to deploy LTE at the macro level first, which was chosen by 43.5 percent of operators. The ability of the small cell to interface with the surrounding macro was the next most popular reason amongst operators, but all respondents chose deployment logistics power, location, backhaul, local authority planning regulations. Around 75 people took the Mobile Europe Alcatel-Lucent LTE survey. Over 42 percent were operators and 79.5 percent of all respondents came from Europe. The full results will be discussed in a webinar in February. 24 Mobile mobileeurope.co.uk