Digital Transition: Advanced Market Lessons Part 1 - USA
2015.09.03   |   42 pages   |   Direction, Strategy and Brand Differentiation

Author:
Patrizia Balia


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Advanced communications markets are going through significant digital transformation, which is affecting every aspect of the market environment. Our research in the UK and US markets highlights significant M&A activity leading to substantial market consolidation characterised by the emergence of three key groups of digital players (converged operators, super mobile-only operators and frenemies).  

  • In this new market environment, operators (both converged and mobile) compete and collaborate with the frenemies whilst smaller mobile players continue to exist in the form of niche MVNOs.  
  • Monetisation of new digital services is beginning to impact service revenues, with leading players focusing on the development and promotion of services such as video content (including ad-sponsored OTT services), IoT/M2M and m-health. 
  • Leading players are busy transforming and integrating their distribution and CRM functions with the aim of enhancing customer experience and offering practical support for new digital products and services.  Operators’ branded concept stores provide live demos of new services and include meeting areas both for consumer and SME customers.  
  • Seamless integration of devices and services is favouring uptake of multi-play and multi-device plans.  Long-term contracts are gradually discontinued, as customers are encouraged to upgrade their smart devices as often as they like through device instalment schemes.  

Insights from these leading markets, presented in two reports (this one details research findings from the USA and the second will explore the UK experience and draw comparisons between these two leading markets), will be most valuable for players in the markets that will follow a similar transitional path.  By taking on board the lessons from leading edge transitional markets, players can ensure their positioning is optimised to limit the potential downsides of market evolution (e.g. loss of voice and SMS revenue), while taking stakeholders and customers to their new position with minimum disruption.

 

Companies: Verizon, AT&T, T-Mobile USA, Sprint, TracFone (America Movil), US Cellular, Virgin Mobile, Boost Mobile, Cricket, Comcast, Google Fiber, Google Fi, Defense Mobile , Rok Mobile, FCC, Wireless Telecommunications Bureau (WTB), Apple, AOL

Countries: USA, UK

Keywords: multi-play, net neutrality, convergence, CRM function, Apple Pay, Google Wallet, mobile-only, distribution channel, OTT video, contract plans, partnerships, OTT regulations, IoT, voice revenue, SME, omnichannel, digital partners, data revenue, Innovation, m-money, Incubator start-up, M2M, NFC, device installment plans, customer experience, Accelerator program, MVNO, Android Pay, m-health, stores, multi-device, retail channel, m-fitness, data pricing, Digital transformation, SMS revenue, OTT,

1

Overview

1

2

Introduction

2

2.1

Background to the Report

2

2.2

Report Content

2

2.3

Currency and Conversions

3

2.4

Further Questions and Feedback

3

3

Market Overview

4

3.1

Key Performance Indicators

4

3.2

The US Market

5

3.2.1

Overall Headlines

5

3.2.2

Technology Overview

6

3.2.3

Key Mobile and Converged Market Players

7

3.2.4

Regional Players and MVNOs

9

3.2.5

Regulatory Environment

12

4

Consolidation, Convergence and New Players

15

4.1

M&A Activity

15

4.2

Emerging Type of Players

16

4.2.1

Converged Players

16

4.2.2

Super Mobile-only Players

16

4.2.3

New Players / Frenemies

18

4.2.3.1

Google’s Evolving Positioning in the US Market

18

4.2.3.2

Google Project Fi

18

5

Pursuing Digital Services Opportunities

20

5.1

Incubator & Accelerator Programs

20

5.2

M-Health and M-Fitness

21

5.3

M-Money

23

5.3.1

Financial Services Overview

23

5.3.2

M-money Role for MNOs

24

5.3.3

Niche M-money Services Driven by MNOs

25

5.3.4

OS Players’ Increasing Involvement

25

5.3.4.1

Apple Pay

25

5.3.4.2

Android Pay and Google Wallet

27

5.4

Video Services

28

5.4.1

Verizon Focus on OTT Video

28

5.4.2

AT&T Focus on Large Scale Integrated Seamless Services

31

5.5

IoT/M2M

32

6

Distribution, Sales & Customer Experience

36

6.1

Experience Centres and Omnichannel Retail

36

6.2

Workshops & Expert Support from Sprint

37

6.3

Device Payment Schemes

39

7

Conclusions & Recommendations

41

7.1

Conclusions

41

7.2

Recommendations

41

 

Appendix – Feedback Questions

43

Related Reports

Digital Transition: Advanced Market Lessons Part 2 - UK
2015.09.21

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Advanced communications markets are going through significant digital transformation, which is affecting every aspect of the market environment. Our research in the UK and US markets highlights significant M&A activity leading to substantial market consolidation characterised by the emergence of three key groups of digital players (converged operators, super mobile-only operators and frenemies).   In this new market environment, operators (both converged and mobile) compete and collaborate with the frenemies whilst smaller mobile players continue to exist in the form ...

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On the whole, MMD reports are more detailed, more extensively researched and more comprehensively written O2 UK, Strategy Team
Mobile Market Development 2015