subject: The Future Of Broadband: Fixedmobile Substitution --- Aarkstore Enterprise [print this page] Much has been made of the opportunity for users and operators to cut the cord, do away with fixed networks, and pursue a mobile future. The opportunity certainly exists, with over 1 billion people expected to use mobile technologies as their primary form of Internet access in 2015. However, the extent of fixed-to-mobile substitution (FMS) will be heavily impacted by the current conditions in the broadband market. As such, FMS will only be viable in specific circumstances over the next five years. Emerging markets with no pre-existing fixed-line infrastructure offer the greatest potential for FMS, but affordability in these markets will be crucial. In developed markets, segmentation will be critical to FMS, and low-end users will be the largest target segment.
Table of Contents :
Executive summary
In a nutshell
Ovum view
Key messages
Recommendations for operators
Mobile-only operators
Integrated operators
Fixed-only operators
Defining broadband FMS
What is mobile broadband?
What is FMS?
Substituting fixed-line potential
Substituting usage
Cutting the cord
How big is the broadband FMS opportunity?
The situation today: Eastern Europe and Asia-Pacific offer the greatest potential
Austria is the exception, not the rule in Western Europe
Australia the broadband FMS leader in Asia-Pacific
Eastern Europe sees FMS without the headlines
The situation tomorrow: Ovums broadband segmentation model
Future broadband usage: a complicated market to forecast
A global view shows mobile-only on the rise
Regional breakdown highlights the importance of fixed-line unavailability
Identifying customer segments for broadband FMS
Those with no fixed coverage are the largest segment globally
Unavailability of fixed lines is critical in emerging markets
Not all emerging markets are the same
Fixed unavailability presents niche opportunities in developed markets
Low-end users in developed markets
How much speed do you need?
Data consumption is another important facet of usage
Low-end users are not necessarily the best targets
A generational perspective in developed markets
Short-term renters are a varied segment, but can be valuable
Single occupancy and shared accommodation are prime targets, but are temporary
Students are low-value and temporary, but may be loyal in the future
Migrant workers growing in importance around the world
A rural or urban phenomenon?
Business customers unlikely to substitute, but there may be niche SME opportunities
Drivers and barriers to broadband FMS
Drivers and barriers suggest that FMS will be a niche opportunity outside emerging markets
Drivers
Fixed voice substitution sets a precedent, especially in developed markets
Unavailability of fixed lines
Mobile network capabilities continue to improve
Service cost brings drivers together
Prepaid tariffs will stimulate uptake
Regulation has a major role to play
Device penetration will be vital in emerging markets
Operator choice has the final say
Barriers
Availability of fixed lines is the key barrier to substitution
Fixed broadband outperforms mobile
Advanced services require high performance
Low-end users are not the most attractive
Mobile coverage is a key barrier
The availability of Wi-Fi can hinder FMS
Mobile is traditionally sold per individual, while fixed is sold per household
User demand for bundles and FMC
Appendix
Methodology
Further reading
Author
Ovum Consulting
List of Tables
Table 1: HSPA entry-level services in emerging markets
