Vodafone ranks number one in the Ofcom competition no-one wants to win

Ofcom has released data detailing the complaints lodged for each telco in the UK, and Vodafone almost clean sweeps the awards.

Collecting the most complaints for broadband, mobile and landline, only Virgin Media’s TV offering saved Vodafone executives from further embarrassment. At the other end of the scale, Sky, EE and Tesco Mobile collected the prize for best performance.

Service Least complaints Most complaints
Broadband EE/Sky Vodafone
Mobile Tesco Mobile Vodafone
Landline EE Vodafone
TV Sky Virgin Media

“People have never had more choice in the phone and broadband markets,” said Fergal Farragher, Ofcom’s Director of Consumer Policy.

“It’s also never been easier to switch your service. So, companies that don’t prioritise great service could see customers leaving them for ones that do.”

Thanks to new rules being introduced by Ofcom, telcos are being forced into greater transparency when it comes to the conclusion of contracts and what deals are being made available, as well as simplifying the process of leaving a service. Soon enough, a simple text message will be enough to switch providers.

Moving forward, the new rules should filter down to the telcos. One would hope this would not only improve customer services, but also the performance of the networks as pressure ramps.

Interestingly enough, Vodafone at the top of the list might come as a surprise to some. This is a company which has been investing intensely in a new, converged network, as well as introducing a major overhaul of the business processes to recapture the lost fortunes of yesteryear. It is easy to forget that Vodafone was once the market share leader for mobile, though now it sits in third place.

While no-one wants to be awarded these prizes, the trends are heading in the right direction in the UK. Ofcom has previously pointed towards data which suggests telcos are getting better at delivering on the glorious promises make by breakfast-themed brand ambassadors on TV.

For example, in the first quarter of 2011 the number of complaints for broadband, mobile, TV and landline services stood at 40, 13, 5 and 38 per 100,000 customers respectively, though this industry average has fallen to 14, 4, 6 and 10. TV might not be heading the right direction, though the data suggests the reliability of these services is improving.

Another factor to consider is that the telcos might just be more honest with their customers today than they were in 2011, though through no fault of their own.

t seems like a distant irritation, but it wasn’t long ago that the telcos could make use of the ‘up to’ metric. This enabled service providers to mislead customers on the performance of products. The fact that the telcos are being more realistic on the performance of products in advertising might be a prominent contributing factor to the number of complaints; if the customer is getting the service it was promised, there is nothing to complain about.

“Complaints about mobile, broadband and landline to Ofcom have fallen to historic lows over the last decade, so it’s disappointing to see a slight increase this time around,” said Richard Neudegg, Head of Regulation at Uswitch.com.

“We hope this isn’t a sign that telecoms providers have taken their eye off the ball, as there is still room for improvement.”

Orange proves convergence should be telco business basics

A decade ago, Orange started trialling convergence in the Slovakian market, but today the success proves it should be the foundation of every successful business.

“Europe is a success story and convergence is the jewel in our crown,” said Ramon Fernandez, Orange CFO and Head of Europe.

In fairness to the Orange business, it has a way of investing in ideas and leading innovation for the European telecoms industry. It wanted to diversify into financial services, so it bought a bank. It wanted to drive home convergence, so started investing heavily in fibre. The smart home, security and energy services are on the horizon, once again proving Orange does not wait around for industry consensus before making its move.

Convergence is a trend which has now seemingly caught fire in the telecoms industry, with Orange arguably the most advanced telco strategically worldwide, but perhaps it should no-longer be considered innovative. Any telco with any sense is positioning themselves for a convergence play.

In the UK, BT is making the ‘Halo’ initiative the centrepiece of the consumer business, while Vodafone’s purchase of Liberty Global’s cable assets in Germany, Hungary, Romania and the Czech Republic sets the telco in the same direction. Convergence is not innovative anymore, it is something that telcos just have to do to stay relevant.

Looking at the Orange business, Fernandez said the telco now has 10.6 million convergence customers across Europe; 5.8 million in France, 3 million in Spain and the rest split across the remaining territories in Europe. Convergence customers now account for 40% of revenues across Europe.

Territory Revenue to Sept 2019 Convergence customers
Romania 813 million 227,000
Poland 1.9 million 1.3 million
Belgium 1.2 billion Unknown
Slovakia 409 million 77,000
Moldova 103 million 27,000

In terms of Group revenues during the last period, Orange reported growth of 0.8% to €10.57 billion for the third quarter, adding to €20.57 billion brought in over the first half. While financial growth might not be eye-watering, the foundations being laid through the convergence strategy offer excellent opportunities in the future.

After years of investing in both mobile and fixed networks across Europe, Orange’s fibre deployments are progressing very effectively, the connectivity foundation is sound. Few telcos can compete with Orange in terms of assets across the bloc, but the customer retention benefits of convergence are allowing Orange to explore new services. Security products are being launched, connected objects are being sold, banking is expanding, energy services are being played with and the team is investing in a smart home platform. Orange is making the evolution through to Digital Service Provider, built on the foundation of connectivity convergence.

While this is an enviable position, it is not one which can be created overnight. Orange has been investing towards the convergence strategy for years, and now other operators are playing catch-up. With results proven, perhaps we should stop talking about convergence as innovation, and just the way telcos should do business.

4G roaming traffic doubles once more – BICS

Roaming platform provider BICS has revealed that 4G roaming traffic around the world doubled for the third year running in 2019.

BICS reckons this indicates surging appetite for 4G connectivity, which is pretty hard to argue with. It also takes this geometric growth as a good sign for 5G, noting that 50 national 5G networks are now live, although we should add that in many cases the term ‘national’ needs to be taken with a pinch of salt. BICS boldly predicts that 5G roaming will gain further traction this year.

“The exponential growth in roaming traffic highlights how important international connectivity has become to the subscriber experience,” said Mikaël Schachne, CMO of BICS. “Through the provision of seamless, cross-border 5G connectivity, operators will be able to create new revenue streams and support a wide range of new and innovative use cases in areas such as automotive, gaming, telemedicine and logistics. As carriers launch 5G networks, roaming must be at the heart of their offerings to deliver maximum value for subscribers.”

The rest of the short press release is mainly spent stressing how great BICS is at enabling all this roaming, which is fair enough but doesn’t really add much value for the curious industry punter. It will be interesting to see what happens to roaming after Brexit, which is due to finally complete its first phase at the end of this month. This is an opportunity for operators and intermediaries to show they don’t need the help of politicians to keep the global telecoms business functioning smoothly.

TomTom to fill the Google mapping void for Huawei

Dutch navigation specialist TomTom has been announced as Huawei’s replacement for Google’s mapping expertise, following the firm’s entry on the US Entity List.

While there was no doomsday sirens sounding when the US banned suppliers from working with Huawei, the trickle-down effects are starting to become much more prominent, especially in the consumer business unit which has fuelled so much growth over the last few years.

“We can confirm that developers can now use TomTom Maps APIs, Map content and traffic services via Huawei’s developer portal,” a TomTom spokesperson said.

Details are thin on the ground for the moment, though TomTom has confirmed it has entered into a multi-year agreement to act as the powerhouse behind navigation, mapping and traffic applications which will feature on Huawei devices.

Huawei’s friction with the White House has been well-documented over the last 12-18 months, though the impact seems to be more of a slow-burner than apocalyptic. When similar sanctions were placed on ZTE in 2017, the disruption to the vendors supply chain was almost an extinction level event. Some US politicians might have hoped the same would be the same for Huawei, though the damage is much more nuanced.

Thanks to the ‘Made in China 2025’ and perhaps more foresight from the management team, Huawei has a much more diverse supply chain and less of a reliance on the US than ZTE. When President Trump signed the executive order banning US suppliers from working with Huawei, it was certainly notable, but the impact was muted, evidence by the fact Huawei’s revenues have continued to grow through the period.

But the consumer division, and Huawei’s smartphones in particular present some difficult questions. And almost all of them focus around Google.

No new Huawei devices will feature any of the Google applications. The immediate challenge is replacing the operating software, Android, but this is only the tip of the iceberg. For Huawei’s OS to be competitive, it needs to have a developer ecosystem, and for many of the applications to work properly, mapping data needs to be plugged into the applications.

While it might not have the reputation of Google, TomTom is certainly no stranger to the mapping and navigation game. Those who are a bit longer in the tooth might remember TomTom being a mapping innovator in the noughties, though it seemingly lost the battle for supremacy with Google. Few get the better of the Googlers, so there is little shame, though this could act as a spring board into a brighter future for TomTom.

TomTom claims to travel more than three million kilometres a year to collect mapping data, as well as augmenting this information with satellite imagery, as well as drawing from data from government and private sources, aerial imagery, and field analysts. The business already has numerous partnerships in place with the likes of Subaru, Alfa Romeo and Stelvio for driving navigation, as well as 5G initiatives with Verizon.

This is a critical step in validating the Huawei OS and developer ecosystem as location-based data is very important nowadays for the performance of many apps and security features. TomTom fills a noticeable hole.

What is worth noting is that while TomTom will offer mapping data to Huawei and the developer community, this is should not be seen as a direct replacement for the Google Maps application. This is a feature which offers basic navigation, which will be simple enough to replicate, though the embedded features will take time. Through Google Maps you can book tables at restaurants, see how busy trains are, access reviews on local business, amongst other benefits. This will take a significant amount of time to replace.

PC shipments back into growth, but can connectivity make it sustainable?

PCs are often seen as the forgotten child of the technology family, though new estimates suggest there is life left in the segment.

We use laptops every day but never discuss the potential for innovation or a refreshment cycle. These are devices which are largely viewed as commoditised and a segment which has already been through its heyday, so attentions are drawn elsewhere in search of the next billion-dollar idea. But there might be life left yet.

According to estimates from Gartner, worldwide PC shipments, desktop and laptop, stood at 70.6 million units in the fourth quarter of 2019, an increase of 2.3% from the same period of 2018. Across the year, shipments were up 0.6% to 261 million units, with Lenovo and HP leading the charge.

“The PC market experienced growth for the first time since 2011, driven by vibrant business demand for Windows 10 upgrades, particularly in the US, EMEA and Japan,” said Gartner’s Mikako Kitagawa.

“We expect this growth to continue through this year even after Windows 7 support comes to an end this month, as many businesses in emerging regions such as China, Eurasia and the emerging Asia/Pacific have not yet upgraded.”

Interestingly enough, while growth is certainly encouraging the potential might well have been curtailed. According to Kitagawa, without a shortage of Intel CPU products on the market, growth may well have accelerated further beyond the numbers which Gartner is putting forward in its estimates. 2012 was the last time the PC segment experienced a full annual cycle of growth.

These numbers are certainly encouraging, but one has to ask whether this could be translated into sustained growth. Perhaps the connectivity industry is where we should be looking to answer this question.

One thing which has always been missed from laptops is embedded connectivity. Users has become accustomed to signing onto a Wifi connection or tethering a smartphone, but with almost everything and anything having a SIM placed in it nowadays, the laptop seems like one of the most obvious places to do so.

Few people would log onto a laptop today without connecting to the internet, so it begs the question as to why 4G connectivity is not commonplace within these devices today. There may be a couple of reasons:

  • Wifi was a better solution
  • Data was too expensive
  • Data tariffs were not designed in this manner
  • Industry was focused elsewhere
  • Customer demand was not present

There is unlikely to be any one reason, more of a blend of each one, but there are emerging trends which could result in SIM connectivity for laptops.

Firstly, Wifi could have been viewed as a better solution because of patchy coverage. Considered we still complain about 4G coverage today, this is a very real reason, though thanks to pressure from regulators and governments, most developed countries are eradicating not spots.

Secondly, the price of a GB of data varies quite considerably, though this is certainly decreasing as more markets shift towards unlimited bundles. The delivery of 4G connectivity is always becoming more efficient, therefore the transition towards commoditised data tariffs will only continue. This will aid the business case for embedded 4G connectivity in laptops.

Staying with data bundles, more telcos are offering flexible tariffs, allowing customers to purchase ‘data buckets’ for more than one device. If the telcos offer such products, alongside unlimited allowances, this will be another justifying trend to embed SIMs in laptops.

Looking at industry attention, there has always been some directed towards laptop connectivity, but it was almost an afterthought. Intel and Qualcomm has investing more in this area in recent months however. Should the products be on the market, at an affordable price, there might be increased enthusiasm from the likes of HP and Lenovo to produce such products at scale.

Finally, user demand. Wifi and tethering do provide an option for connectivity, but they also do for wearables. Working from home or on the road is becoming increasingly common, a trend which might encourage the adoption of connected PCs.

What is worth noting is that as there is not a silver bullet, it becomes more difficult to become optimistic about the future of SIM connectivity in laptops.

As tethered connectivity is a well-practiced activity, therefore embedding modems in laptops might be the solution for a problem which is not that great. The cost of adding modems has always been an issue for the industry, though there is one area worth is keeping a keen eye on.

In July, Apple announced it was acquiring Intel’s smartphone modem business. This might be so Apple could gain greater control of its iPhone supply chain, though it also presents the opportunity to embed modems into the MacBook.

As embedding the modem into the PC device could be done at a substantially lower cost, and Apple does have a customer base which would be tolerant of a premium placed on devices.

Although the market is not particularly optimistic about the idea of modems in laptops, Apple could change that perception. Apple’s idea to drastically shift mobile devices form factor was originally met with pessimism, but edge-to-edge screens are the norm nowadays. If Apple can prove its customers want to buy products with embedded modems, others will most likely follow.

This is perhaps a trend which could turn the tides of the PC segment permanently. Today’s estimates of growth are encouraging, but you have to question whether it will be a sustained change, after all, the primary driver for new purchases is Windows 10. Should laptop connectivity catch-on, there might well be a refreshment cycle for these devices, especially in the enterprise markets where mobility is being encouraged.

However, it is always worth bearing in mind that users are perfectly happy with the connectivity status quo of today, and the price of the products. The issue is, are connected laptops the solution for a problem which does not actually exist?

4G and 5G Capacity solutions – comparative study

Operators are looking to optimize their costs while increasing their 4G/5G network capacity to meet the ever-increasing demand for data. Among the strategies being employed is the use of various antenna technologies to enable higher data rates. These include multiple-input, multiple-output (MIMO) techniques such as beamforming, as well as the use of multibeam and active antennas.

When determining the best upgrade approach for 5G, a few factors to consider include:

  • Will capacity gains justify the costs of deployment?
  • Will legacy infrastructure support additional weight and wind loading?
  • Can power be economically delivered to the tower top?

This technical white paper evaluates various techniques for increasing capacity in 4G and 5G networks with considerations on cost, ecosystem support, FDD/TDD, and channel bandwidth.

 

Belgian watchdog puts the brakes on Orange and Proximus JV

The proposed network sharing joint venture between Orange and Proximus has been slowed as the Belgian Competition Authority (BCA) launches an investigation.

At the request of Telenor and Telenet, the Belgian authorities have placed temporary measures on Orange and Proximus to halt a network sharing joint venture while it investigates the potential impact on competition in the market. The original agreement was between the two parties was concluded in November and will remain stagnant until at least March 16.

Both Orange and Proximus have noted the complaint but rejected the basis of the opposition from Telenet.

“The sharing agreement for the mobile access network will have positive effects for the customers and for the Belgian society as a whole, in particular a faster and more extensive deployment of 5G, a significant reduction in total energy consumption and an improvement of the global mobile service experience, while maintaining a strong differentiation between the parties on services and customer experience,” the pair said in a joint statement.

As part of the joint venture, the pair have said the rollout of a joint radio access network would allow the number of mobile sites to be 20% higher compared to each operator’s current stand-alone radio access network. This improved coverage is claimed to increase the footprint to more than 10,000 households across the country.

Each party would retain full control over their own spectrum assets and operate their core networks independently to drive differentiation. The network sharing agreement would span across 2G, 3G, 4G and 5G.

While this does sound positive for the consumers of Belgium, a complaint from the third-largest operator should not be a monumental surprise.

Telco Subscriptions Market share
Orange 4,895,631 35%
Proximus 6,310,403 45.1%
Telenet 2,801,759 19.9%

Statistics curtesy of Ovum World Information Series (WIS)

Telenet’s has suggested the joint-venture would create a quasi-monopoly, as the number of infrastructure players in the market would be reduced from three to two. The telco also suggests BEREC guidelines would prevent such a joint-venture from materialising as it would undermine intense infrastructure competition.

Telenet is also pointing towards a similar agreement in the Czech Republic between O2 and T-Mobile. Despite this agreement was far less wide-ranging (it did not span across 2G, 3G, 4G or 5G), the European Commission opposed the tie-up with the suspicion it would have a detrimental impact on competition in the country.

With the drive towards 5G and full-fibre broadband straining CAPEX budgets throughout the industry, the impact is perhaps felt more in countries such as Belgium where populations prevent scale. Network sharing agreements are not uncommon as a means to more efficiently invest, though these are usually focused on specific geographies or limited to 5G expenditure. Other initiatives are usually in countries where the base-level of competition is higher than what is currently in play in Belgium.

While this investigation is underway, Orange and Proximus are able to begin the groundwork for the joint-venture, sending out RFPs (Request for Proposal) or select staff to be transferred for example, though Telenet has presented an interesting case. European regulators are incredibly sensitive to competition, especially in markets where there are only three telcos.

Verizon shakes things up with ‘Mix and Match’ bundling options

US operator group Verizon has unveiled a ‘Mix and Match’ offering as part of its drive towards service bundling.

While the monthly bill does still look to be very expensive, this is the US after all, it is a fair and reasonable attempt to drive disruption in the pricing area of the telco industry. Without sounding too bold, it could even be considered by some to be innovative.

“Customers have been loud and clear about their frustrations with cable, and we’ve listened,” said Frank Boulben, SVP of Consumer Marketing and Products at Verizon. “As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency.

“Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges. We’re putting an end to the traditional bundle contract and putting customers in control.”

Telcos are generally not the most innovative, but this looks to be an excellent idea from Verizon. The final bill might end up looking expensive in comparison, but there are few other options which offer this element of flexibility. It does look to be a rare example of an initiative which is customer centric.

Another element which will certainly interest some customers is this is a pay monthly contract with no fixed term. Customers can leave the service by simply giving a months’ notice, while there are bonus features for current mobile subscribers.

Current mobile subscribers will benefit from an additional $20 discount on the services per month. In addition, the same subscribers will be given a $10 discount towards their next device purchase for each month they are a ‘Mix and Match’ customer.

Bundling together various services, or convergence, is proving to be an increasingly common strategy around the world, though perhaps Verizon has more to gain that many. The telco has a monstrously large subscription base for its mobile business, and while it has a presence in fixed broadband, the scale is no-where similar. Cross-selling and offering discounts to the 93 million mobile subscribers is one way to drive the business forward.

LG promises mobile profits by end 2021

LG’s new CEO has promised to recover the lost fortunes of yesteryear, driving the mobile business unit towards profitability within two years.

After a pre-Christmas game of management musical chairs, LG’s new CEO Brian Kwon is quickly setting to work. Some might set themselves an easy task for a new job and new year, but Kwon is diving into the deep-end to tackle the former money-making machine and current problem child of the LG family; the mobile communications business unit.

“LG Electronics mobile business is going to be profitable by 2021,” said Kwon. “I can say we can make that happen as LG Electronics will expand our mobile line-up and steadily release new ones attached with some wow factors to woo consumers.”

In an industry which is desperately starving for and disastrously struggling to provide innovation, what Kwon envisions to woo customers remains to be seen. Details were very thin on the ground, but the mobile division certainly needs a jolt from somewhere.

Year-on-year, the mobile communications business has not been performing. For the third quarter of 2019, sales declined 24% compared to 2018, where as the unit declined 21% in the second period and 29% in the first. 2019 was a pretty disastrous year for the mobile business, though fortunes have been slipping away for years.

At the beginning of the last decade, LG was very much a different kind of player in the mobile market. In fact, it is quite remarkable the way the market has shifted over the course of ten years.

Brand 2019 Q3 Shipments Year-on-year 2019 Q3 Market share
Samsung 78.4 8.4% 20.6%
Huawei 66.8 28.4% 17.6%
Apple 44.8 (4.6%) 11.8%
Oppo 32.7 (3.5%) 8.6%
Xiaomi 31.7 (4.8%) 8.3%
Vivo 29.5 (3.2%) 7.8%
Realme 10.2 684% 2.7%
Motorola 10 (13%) 2.6%
LG 7.7 (26.7%) 2%
Tecno 5 8.7% 1.3%

2019 Q3 smartphone shipment estimates from Counterpoint research

Although the likes of Samsung and Apple would have been at the top of the leaderboard at the beginning of the last decade, everyone else has gone through a considerable shake-up. Several of the leading manufacturers today did not exist 10 years ago, while some brands have not aged well. HTC, Nokia, Microsoft and Blackberry are all extinct, while LG and Motorola are two shadows of their former heavyweight stature.

The world has been captivated by the newly-emerging Chinese brands, with Huawei leading the charge. These companies have been regularly stealing market share, and profits, from some of the older smartphone brands and it will take some big moves to counter these trends. LG still controls a useful 10% market share in the US, though this is shrinking year-on-year and is perhaps down to the anti-China sentiment in the country as opposed to anything else.

Although the LG picture is not the prettiest, there are some useful ideas coming out of the division. What is also worth bearing in mind is this is a consumer electronics giant which produces some excellent products. The mobile business unit is suffering, not necessarily LG on the whole.

Looking at the products on offer, one of the more interesting in recent months. The LG G8X ThinQ is a dual screen product, addressing multi-tasking and increased screen real estate trends, but thanks to the modular design, consumers do not have to carry around bulky devices or worry about breaking folding screens. It is a very useful product, albeit niche.

Turning around this performance will certainly be a challenge for Kwon and the newly appointed management team. Not only will internal issues have to be sorted, external momentum and brand popularity will have to be considered. LG is no-longer considered to be a top-end mobile brand, as rivals have stolen the thunder.

Orange opens new Africa and Middle-East HQ in Casablanca

Orange has announced it has opened its new headquarters for the Africa and Middle-East region in Casablanca Finance City Tower in Morocco.

The Africa and Middle has been gradually offered more autonomy as a unit since 2015 and opening a headquarters on the continent is as much a symbolic gesture of this trend continuing. With 125 million customers across the region already, Orange is certainly making progress in an often challenging market.

“Orange is one of the rare international groups to have made the strategic choice, 20 years ago, to seek to develop in Africa and the Middle East,” said Group CEO Stephane Richard.

“We have always been convinced of the immense potential of this continent. In many ways, it can be seen as a model for digital transformation; mobile money is a great example of this.

“One of the key success factors behind new services is to develop them in Africa so that they are adapted to specific local requirements and so meet the needs of our customers. That is why we have decided to organise the management of our business in Africa and the Middle East from within the region directly from the African continent.”

While many telcos have desires to cash-in on the under-developed markets around the world, few have made as obvious a success of the ambition as Orange in Africa.

Looking at the most recent financial figures, revenues for the Africa and Middle-East business rose 7.6% for the third quarter of 2019, bringing in €1.447 billion. For the first nine months of 2019, revenues across the unit accounted for €4.185 billion. Orange now has 22.5 million 4G customers across the region, up 49% year-on-year, while a third of 44m Orange Money customers are active.

Looking forward, the prospects are looking very favourable for Orange. The team has launched 4G in 17 markets, while investing €1 billion in the networks across the year will certainly see some new developments. The team is also heavily targeting the agricultural industry with IOT services, hoping to increase revenues between 10-30% on average.

Looking at the Engage 2025 strategy, Africa and the Middle-East has been highlighted as the most significant growth engine for the business. This is potentially a very lucrative region for the telco which has laid the groundwork in recent years to realise its ambition of being the ‘reference digital operator’ in the region.