The extraordinary digital revolution towards real-time, any-time connectivity is transforming the world and is creating many opportunities for operators. Some operators have been significantly better than others in achieving growth and leveraging ever-evolving demand. We call them Frontrunners.
Much can be learned by analyzing the Frontrunners. We have found that they have common traits, yet often very different strategies, for approaching the market and running their operations to enable profitable, sustainable growth. The common traits, as well as the strategies used by the Frontrunners, form the core of the Growth Codes.
Using the Frontrunners for our research provides an opportunity to learn from the best. In recent work, we have investigated what some of the Frontrunners, along with other leading operators are doing within IoT towards 5G.
Frontrunners are characterized by superior service revenue growth and a high share of data revenues, and they are the most successful Mobile Service Providers in the industry.
We have been following the development of Frontrunners since 2012, when there were just five. After analyzing financial reports from 2017, the list has grown from 30 last year, to 62 Mobile Service Provides meeting all our criteria for Frontrunner status. This large increase in Frontrunners suggest there may be a shift in the industry and that the pieces are falling into place where data revenue will lift the entire market towards stronger growth.
Frontrunners are determined by three main criteria:
- Achieving 5% or higher full year growth on wireless service revenue
- Maturity in respect to capturing business through a higher proportion of non-voice revenue, beyond 25 percent
- Possess a strong mobile market position with at least a 10% wireless market share and $100M USD in wireless revenues
In addition, we do a check to see that they are profitable with 15% or higher EBITDA on wireless services.
These Mobile Service providers have succeeded through a combined focus on technology and a go-to market strategy across the seven Growth Codes. As the graph above shows, they were able to achieve an average 10.8% CAGR (9,9%) in revenue between 2013 and 2017. Comparably the “other”-group achieved a 1.5% (-0.8%) growth and this shift to positive territory is another indication of change in the industry.
There may be multiple reasons for the dramatic increase in Frontrunners and the positive over all changes, but a few observations may be worth mentioning.
- LTE has been rolled out to the majority of markets and there are no longer any technical bottlenecks holding back data growth.
- Consumers have generally accepted the practice of charging for data volume and usage levels have mostly shifted from Megabyte to Gigabyte territory and top ups and tier shifts are becoming commonplace.
- Mobile Service Providers have figured out how to monetize data in a sustainable way mostly matching offerings towards user needs.
We are continuously following the progress of the Frontrunners, and the Growth Codes concept is continuously developing. Today Growth Codes provide both insights and a structure to examine your own business in all aspects relevant to profitable business growth, allowing you to challenge your own thinking about your own business.