Flash Insight: How esim will force mobile network operators to differentiate further

Transcription

1 Also keep an eye on this: Flash Insight: How esim will force mobile network operators to differentiate further May

2 The esim accelerates further digitalization of the telco industry. Mobile network operators have to deal with emerging competition. esim Impact and Measures The esim introduction is coming soon Finalization of GSMA Specification in 2016 will guarantee compatibility of devices and operator profiles. OEMs and other connected device manufacturers drive esim introduction. IoT driven business models will take advantage of esim and offer growth potential for MNOs. Mobile network operators face emerging competition Obsolete manual SIM-card changes will lower switching barriers. Customer loyalty will decrease and thereby increase churn rates. In addition, global digital players and OEMs will compete for customer relationships. Only offering added value can guarantee differentiation Today s core competences such as data and voice are no longer differentiators. Applying a price differentiation strategy instead, would require rigorous cost-cuttings. Added value needs to be offered to differentiate from other network operators. 2

3 Major companies drive esim standardization and strong growth of connected devices. The esim is coming. esim Breakthrough Stakeholder Support Growth Potential for esim through Connected Devices Introduction Indicators 34 GSMA Specification to be finalized by Summer connected devices in bn OEMS participate in order to build smaller devices and have already launched first products. esim-providers drive the technology in order to stay in the market. And various others MNOs shape Specification and introduction to set the rules further on. 3

4 But esim will accelerate existing sector trends, by lowering switching barriers and enabling new entrants. esim Impact on Selected Sector Trends esim Impact Major Sector Trends Accelerated by esim Reduction of switching barriers Redundancy of SIM-card changes Over-the-air SIM-provisioning Absence of logistics and delivery Ease of Connectivity Management On-demand connectivity offerings On-device contracts Remote SIM management Digitalization of Customer Relationship Real-time processing of transactions in BSS E-commerce ready OSS Online service & support Connectivity driven business models Growth of connected devices Need to supply and manage connectivity MNOs Market Saturation Mobile network revenues showing low growth rates Price competition on plans and handsets New Competitors Competition from entering global digital players OEMs entering customer relationships In the following, these trends will be analyzed in detail! 4

5 Case in point: Price competition will intensify among MNOs. OEMs and global digital players will enter as new competitors. esim Impact on Market Conditions Stable Markets at Present Fierce Competition in the Future MNO A MNO B MNO A MNO B New Entrants Lock-in effects from physical SIM-cards Competition from well-known operators Offerings increasingly identical Enhanced price competition among MNOs Digital global players offering connectivity OEMs competing for customer relationships 5

6 To evade the intensifying battlefield, added customer value has to be offered on top of the existing core products. Competitive Strategies for the esim Battlefield Added Value on Top of The Core Products Additional Services Assisting in dealing with complexity from growing number of connected devices. Unmodified Offerings Current core competence network quality loses relevance. Value proposition loses attractiveness. Competitors will take the lead. Price Differentiation MNOs already now give heavy discounts. Fierce competition will increase price pressure. Race to the bottom: Rigorous cost-cuttings Offering OTT services generates bundling effects. esim challenges and opportunities remain unaddressed. Attacks on traditional revenue streams will not be compensated. Improving customer experience on core products by applying esim advantages. Adding value on top of data and voice as differentiator between MNOs. 6

7 As an example: Satisfying the need to manage customers growing connected device ecosystem will serve as an added value. Added Value Potential and Intended Effects Connected Device Ecosystem Added Value for Customers Results MNO One Single Contract for All The number of connectable devices per consumer will shoot up. Integrating all devices in one single contract will increase convenience. Device Management Solution Customers have a need to manage device-specific settings. Complexity has to be minimized through an easy-to-use esim device management ecosystem. Reinforcing Loyalty Addressing customer needs Increasing customer satisfaction Building New Switching Barriers Switching MNO requires SIMprofile changes on all devices Switching MNO means losing device management capabilities How to derive your added value offering in our next Flash Insight. Keep tuned. 7

8 MS&C would like to get in touch with you to discuss solutions for managing the esim impact on your business. Axel Meiling Associate Partner at Mücke, Sturm & Company Contact details: Headoffice Munich Theresienhöhe München T F Several years of consulting experience on the implementation of esim processes for European MNOs Experience in the development of measures to strengthen value propositions for MNOs in the esim era Proven company track record in digital transformation and optimizing customer experience management More about Mücke, Sturm & Company: Office Hamburg Brooktorkai Hamburg 8

9 Copyright and Sources Copyright Sources This document is intended for personal use only. Distribution is only permitted without any changes or omissions publication, in whole or in parts, requires prior written consent by MÜCKE, STURM & COMPANY and correct citation of sources. Slide #1 (Title): Picture: Giesecke & Devrient Pressebilder Telekommunikation Slide #3: Growth Potential for esim through Connected Devices: Business Insider The herein published texts and graphics were used by MÜCKE, STURM & COMPANY in the context of a presentation; they themselves do not represent the presentation in its entirety. All mentioned company names, logos, brands, brand symbols and other copyrighted material are the sole properties of the respective company; they are only used for illustrative purposes. 9