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European Converged Devices & Services Markets
Frost & Sullivan, Aug 2004
Converged Services Offer Growth Potential in Saturated Telecommunications Market
The European converged devices and services markets are a direct result of the increasing saturation and competition in the mobile and fixed telecommunications markets. Telecom carriers are seizing the opportunities these emerging markets offer to strongly differentiate themselves from other carriers, increase market share and customer loyalty, provide cost-effective competitive bundles and cross-sell. They are also attempting to create fresh revenue opportunities through value-added services such as unified messaging, call completion, single number and single billing. With their potential to help carriers offer added convenience to users, converged services are likely to gain increasing importance. By 2010, almost 13 per cent of contract subscribers are expected to use a converged service with a single handset.
This research from Frost & Sullivan is an invaluable tool for companies interested in the European converged devices and services markets. It provides a detailed analysis of the market and its expected evolution, the positioning of different carriers and analyses the organisational issues that carriers face. The research also provides a number of different case studies of successful converged services both in Europe and the United States.
Carriers Must Address Organisational Issues for Successful Services
By definition, an integrated service implies that both fixed and mobile carriers or divisions must work together in a mutually beneficial way. This task is often difficult due to organisational issues. For instance, resolving the question of customer ownership or finding a mutually acceptable revenue and cost-sharing model can act as major restraints to the growth of converged services.
Carriers must find a way for services to be delivered to the market in a manner that is beneficial to the different divisions or partners. Apart from sorting customer ownership issues, the different parties must have a clear customer segmentation model to avoid or minimize internal competition, remarks the analyst of this research.
Go-to-Market Complications and Limited Device Availability Hinder Growth
Given that converged services and devices are complicated and therefore difficult to sell, channels need to launch aggressive marketing campaigns clearly outlining their many benefits. Positioning these services as a complete voice solution for businesses and consumers is essential. Further, the limited choice of handsets available will be a setback in the consumer market. When choosing a mobile, consumers pay great attention to the handset. A limited range of handsets to select from can severely reduce the appeal of a converged device service.
Despite these challenges, the future for converged services is quite promising. The total number of converged service subscribers in Western Europe is about
4.5 million and this is likely to increase rapidly to almost 50 million in 2010, notes the analyst. In an increasingly saturated market where competition is intensifying, converged services provide a growth market and a powerful way of increasing customer loyalty.
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