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Executive summary In a nutshell Ovum view Mobile telecoms is resilient How the economic downturn has hit MNOs The mobile industry is not completely immune Foreign exchange fluctuation Business cutbacks Unemployment Exodus of migrant workers Declining remittances Fewer tourists Fall in government revenues Consumer confidence MNO lessons MNOs still need to get the basics right Be corporate, in the classic sense Plan ahead Evaluate risks Cut costs Manage cash flow Be bold and convincing about price increases Treat the customer as king Retain and understand customers Provide customers with value for money Pamper your business customers Maintain marketing push Don’t lose sight of what’s important Ramp up usage - both voice and data Protect the ‘crown jewels’ - voice revenues Beware of the ‘data revenue’ trap Partners have a role Don’t take handset suppliers for granted Don’t push dealers too hard Keep an eye on external forces Watch out for the government Regard technology as both friend and foe Beware of ‘minority’ standards Innovation assures the future Regional analysis: North America Economic outlook Market overview Noticeable slowdown in connections growth, but no decline Financial performance slows, but still better than most markets Coping strategies Prepaid growing in the US Data catching up with the rest of the world Unlimited plans become more common Managing your own churn - and making the most of Sprint’s churn Bringing the mobile home Thinking (and connecting) out of the box Case study: AT&T focuses on data Regional analysis: South & Central America Economic outlook Market overview Subscriber growth continues unabated Strong financial growth continues Coping strategies Boost usage in heavily prepaid markets Focus on post-paid - and even SIM-only Seize the data opportunity Get the basics of a maturing market right: manage churn and promote value Boost synergies with equipment standardisation and network sharing Case study: Vivo Brazil Regional analysis: Asia-Pacific Market overview High-level view of negative economic impacts Businesses cutting spending first, followed by consumers Prepaid hit as overseas workers exit Forex movements create havoc Roaming revenues retreat Lower inflation brings benefits Impact of recession Japan: impacts offset by one-off gains from industry restructuring Taiwan: aggressive competition causes revenue contraction Hong Kong: falls in international roaming lower margins Australia: impact begins late in 2008 Singapore: biggest risks are the exit of foreign workers and reduced roaming Thailand: economy hitting mobile roaming and consumer confidence New Zealand: impact still minimal Coping strategies Defensive cost cutting and capex reduction Strengthening the balance sheet Competition subsides but moves to the low end Discount players do well with shift to ‘value’ segments Regional analysis: China Economic outlook Market overview 2008 a busy year for China Impact of recession Coping strategies China Mobile: outgrowing the recession China Unicom and China Telecom: focus on service bundles Regional analysis: India Economic outlook Market overview Coping strategies Case study: Reliance Communications Regional analysis: Eastern Europe Economic outlook Market overview Impact of recession Impact at a corporate level Impact at an operational level Coping strategies Case study: T-Mobile Hungary Regional analysis: Russia and New Independent States (NIS) Economic outlook Market overview Impact of recession Coping strategies Case study: MTS Russia Regional analysis: Western Europe Economic outlook Market overview France Germany Italy Spain United Kingdom Impact of recession Coping strategies Case study: Vodafone UK Regional analysis: Middle East Economic outlook Market overview Impact of recession Coping strategies Case study: Vodafone in the Middle East Regional analysis: Sub-Saharan Africa Economic outlook Market overview Coping strategies Case study: MTN in Africa List of Tables Table 1: Table 1 The big picture: region by region List of Figures Figure 1: Impact of recession on MNO revenues Figure 2: Key lessons for a resilient MNO Figure 3: Voice versus data revenue forecasts Figure 4: 2008 quarterly handset shipments growth rates Figure 5: Year-on-year subscriber growth in North America: 1Q08-4Q08 Figure 6: Quarterly revenue growth of selected North American MNOs: 1Q08-4Q08 Figure 7: Year-on-year combined subscriber growth for America Movil and Telefonica: 1Q08-4Q08 Figure 8: Quarterly revenue growth rates and margins for Telefonica Latin America and America Movil in 2008 Figure 9: Year-on-year revenue growth rates for Asia-Pacific MNOs Figure 10: Subscriber base of telecoms operators in China: December 2008 (millions) Figure 11: Subscriber numbers for selected operators in India Figure 12: Revenue growth rates for selected operators in India Figure 13: Quarterly revenue growth rates for selected MNOs in 2008 Figure 14: Quarterly revenue growth rates for selected MNOs in 2008 Figure 15: Quarterly revenue and subscriber growth rates: France Figure 16: Quarterly revenue and subscriber growth rates: Germany Figure 17: Quarterly revenue and subscriber growth rates: Italy Figure 18: Figure 18 Quarterly revenue and subscriber growth rates: Spain Figure 19: Quarterly revenue and subscriber growth rates: UK Figure 20: Quarter-on-quarter revenue growth for selected Middle Eastern operations Figure 21: Half-yearly revenue growth rates for selected MNOs in 2008