Issue #2004 - 02
OUTLOOK & TRENDS
Wireless Trends for 2004 - Deloitte's Version
BROADBAND ADOPTION AND APPLIANCES GATHER STEAM; CELLULAR MOBILE TO BECOME MORE PERVASIVE AND MORE PERSONAL IN 2004
New Deloitte Reports Indicate Deepening of Current Wire-Line and Wireless Technologies, New Revenue Streams from Voice/Data Transition
NEW YORK, January 27, 2004 – Telecommunications executives can anticipate broadband adoption growth, new broadband appliances, rising VoIP subscribers, increased offshoring and rising penetration among cellular subscribers in 2004. Deloitte Research’s “Wire-line Predictions 2004 Report” and “Mobile and Wireless Predictions 2004 Report” each highlight 10 trends that uncover new opportunities for revenue through increased deployment of wire-line and wireless technologies.
“Amidst the intense competition and regulatory hurdles in the telecom industry, flexibility in pricing and increased broadband demand will drive a deeper penetration of wire-line and wireless technology in households and businesses alike,” said Phil Asmundson, managing partner of Deloitte's Technology, Media & Telecommunications (TMT) Group. “Broadband will become progressively more mainstream as broadband appliances stimulate uptake. Operators are investing again and consumers are hungry for new applications, based on both wireline and wireless networks.”
While overall broadband adoption will continue to grow in popularity within the United States, small businesses will be motivated to migrate towards broadband as the demand for faster email and Internet access increases while pricing falls and connection speeds rise. New broadband appliances such as game consoles, video phones, home security systems, set top boxes, VoIP phones, digital hi-fi and home media systems will also drive robust broadband adoption this year and expanding broadband’s functionality beyond PC-oriented technology. The industry’s ability to launch compelling broadband appliances will have a direct impact on broadband demand.
As consumers continue to embrace broadband, the United States will likely join Japan in boasting over 1 million VoIP subscribers. Contributing to this popularity will be enterprise adoption of VoIP into their core networks. The business market will begin to migrate to VoIP, compelling operators to prepare for the transformation of the telecommunication industry.
Offshoring will also gain traction by providing the fixed telecommunications industry with a vehicle to meet the growing demand, moving selected processes offshore to reduce internal costs. Offshoring communications requirements also represent a significant opportunity for the industry, providing voice and data communications to the many American firms looking to relocate processes abroad.
The complete list of ten wire-line predictions in 2004, as outlined by the Deloitte report, is as follows:
Steady broadband adoption.
The broadband appliance hits the High Street in Q4, 2004.
End-to-end VoIP is an essential element of operator’s general strategy, even if usage in 2004 will be niche.
Data charging becomes variable, as price gets flatter.
Wire-line still dominates voice.
WiFi hot spots will remain more froth than substance.
Wireless LAN will have most impact in non-office enterprise environments and will drive demand for the core network.
A wide range of competitors will continue to reduce incumbents’ market share.
Offshoring will offer a double opportunity for the fixed communications sector.
Operators turn to technology for revenue growth.
Mobile and Wireless Predictions
While compelling data applications are still in development, wireless voice applications will remain the primary source of cellular mobile revenue. To stimulate further demand for voice services, operators will need to provide improved quality and offer a broader range of services, especially those that combine voice and data, such as IP voice mail.
Cellular mobile subscribers will also continue to rise as new customer targets are identified. New devices that are tailored to meet the demands of currently under-served customers, such as the over 55s, will provide a rich source of revenue, as will the uptake of color handsets that incorporate cameras. Simultaneously, machines that traditionally have not included mobile characteristics will have embedded cellular devices, improving their productivity.
Following is the complete list of ten mobile and wireless predictions in 2004, as outlined by the Deloitte report:
1. Voice will continue to dominate cellular mobile’s revenues and profits.
2. Cellular mobile data growth will slow, dragged by stagnant consumer text messaging growth.
3. Cellular mobile penetration rates will continue rising.
4. More 3G, but not yet for the masses.
5. Mobilizing the enterprise will spread but remain niche.
6. Push applications will be far more effective than pull applications for cellular mobile.
7. The mobile Internet, as a major revenue stream, remains an aspiration.
8. WiFi hot spots will remain more froth than substance.
9. Wireless LAN will have most impact in non-office enterprise environments and homes.
10. Color and polyphony will enhance the mobile phone’s personality and drive revenues.
Both reports were compiled by the TMT group within Deloitte Research. Input was provided by clients, leading industry and financial analysts, and the 4,000 strong global Deloitte TMT team. Full copies of the reports are available at
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