Smart Phone Essay

1099 Words5 Pages
Schroders Smartphone revolution: Friend or foe to telecoms operators? Research Paper Unpredictable mobile data usage creates uncertainty over future cashflows and revenue James Gautrey Global Sector Specialist, Technology and Telecoms August 2011 2 Smartphone revolution: Friend or foe to telecoms operators? Unpredictable mobile data usage creates uncertainty over future cashflows and revenue Executive Summary Smartphones are increasingly dominating the world of mobile phones. The advent of mobile data has enabled internet on the move and now, as the smartphone becomes evermore affordable, it is rapidly reaching the masses. This has widely been lauded as positive by telecoms operators. But industry and investors alike must beware. Mobile data actually decreases the amount customers spend and may reduce revenues at a time when costs are rising. Investors ignore this at their peril. The impact of mobile data on customer behaviour As consumers become more familiar with mobile data and the rich services on offer from platforms such as Apple’s App Store, mobile operators’ revenues could actually decline as consumers begin to substitute highpriced voice and text services for lower-priced data alternatives. The problem arises partly because data is priced so cheaply. For example, data in the UK is priced 10-20x cheaper than traditional voice and SMS on a per bit basis – some estimates put this disparity even higher. If an operator’s pricing structure permits, consumers can substitute some traditional voice and text packets for cheaper ‘over IP’ alternatives such as Skype (voice) and WhatsApp (text). The monthly bill falls while usage is effectively unchanged. KPN recently provided a slide to demonstrate this effect. Figure 1: Impact of ‘over IP’ alternatives on phone bills Source: KPN company presentation Research Paper: Smartphone revolution:

More about Smart Phone Essay

Open Document