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Lessons from the top 10
Operators need to maintain a balanced service portfolio, carefully manage cost per megabyte of data and exploit existing opportunities while developing new ones. These are the conclusions of an Analysys report on the world's top 10 wireless services.
Analysys determined the top 10 services by choosing those that are world-leading in terms of market potential, implementation and suitability for reproduction. The list comprises a wide cross section of services, including voice telephony, small-screen data and high-speed internet/intranet offerings. Analysys concludes that a balanced mix of these is the key to operator profitability.

The report advises operators to view their service portfolios as a whole, and to manage overall usage and cost per megabyte carefully. Operators need to fill their networks with an optimal balance of services in order to, ideally, generate revenue of more than USD 0.5 per megabyte. Operators must also take care not to cannibalize existing revenues as they evolve their tariffs in order to introduce 3G services.

 

Voice features strongly in the top 10, with services from Sprint PCS in the US, 3 UK and O2 Germany taking spots one, two and 10 respectively. Analysys believes voice will continue to be the dominant revenue driver, and that fixed-mobile substitution and the development of prepaid services are two high-value opportunities. Managers are therefore advised to focus on voice in order to drive growth in both usage and revenue.

 

NTT DoCoMo's FOMA and Vodafone's Vodafone live! service bundles, ranked fifth and sixth respectively, are both listed as focal points for the development, branding, promotion and introduction of data services. Vodafone provides an example of how to exploit size to achieve economies of scale, while FOMA illustrates the importance of handsets, coverage and careful pricing in making the transition to 3G.

 

Xing's ringtone downloads and IN-FUSIO's game downloads, eighth and ninth respectively, both illustrate the valuable role of third parties, as services grow in complexity and become dependant on specialist expertise and content. Seventh-placed TM3, from T-Mobile, provides an example of how to integrate emerging technologies with 3G to enhance service propositions and address new opportunities.

 

Analysys concludes that 3G will play a critical role in unleashing the full potential of existing services, as well as enabling new ones. In addition, the lower cost and higher capacity of 3G will enable operators to earn more fixed voice revenues. But Analysys stresses that operators need to focus on the basics of 3G coverage, quality of service, handsets, content and marketing. Global economies of scale should be exploited where possible and relationships with content partners must be formed.

 

The report ends by recommending actions for operators to take. These include reviewing their service portfolios against the top 10, bolstering short-clip videos and developing bundles of services. Operators are advised to look for economies of scale and opportunities to benefit from complementary services, such as WLAN. The report also cautions them against neglecting voice telephony and overlooking the importance of text messaging when developing their 3G portfolios.