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tyntec Forecasts Top Mobile and Telco Predictions for 2013

Telecom Veteran Anticipates More Collaboration Between Mobile Operators and OTT Providers Plus Increased Investment in LTE

SAN FRANCISCO, CA -- (Marketwire) -- 12/12/12 -- tyntec, a mobile interaction specialist, today announced its top six predictions for the global telecom industry in 2013. tyntec's co-founder and CTO Thorsten Trapp, a ten year industry veteran, expects the telecom industry to be challenged in the coming year as operators learn to adapt to the rapidly changing mobile landscape.

With the emergence of free or low cost messaging services and OTT players, mobile operators have been forced to innovate, rather than rely on traditional voice and SMS services. As revenues are continually threatened, carriers will reevaluate their business models and search for new revenue generating markets and partnerships. As a result of this innovation, 2013 will prove to be a favorable year for mobile users. Consumers will experience lower prices and new applications as operators and internet companies compete for market share.

"2012 was the year of mobile -- big brands and internet companies have just started to realize the potential impact that mobile communications can have on their engagement with consumers," said Thorsten Trapp, Co-Founder and CTO of tyntec. "We expect the mobile trend will continue in 2013, with SMS being the most rapidly changing application. Competition between operators and Internet companies will cause these two distinct worlds to work together in different ways."

tyntec's 2013 predictions for the telco industry include:

We will witness a rebirth of SMS.

In times of crisis or low network connectivity, SMS remains the go-to communication mechanism. In the aftermath of hurricane Sandy, residents in New England lost power for days, making the task of voting in the Presidential election a difficult undertaking. To help voters find the nearest polling station, Google set up a custom instance of an SMS-based locator for voters. When disaster strikes, SMS has a major advantage over voice, OTT services and email. This time next year, rather than focusing on "the death of SMS," we'll be discussing "the rebirth of SMS" thanks to its proven reliability and interoperability in times of crisis.

Google and Facebook will take over the world with SMS.

Picking up where they left off in 2012, the world's two biggest Internet players will demonstrate the power of SMS as they spread connectivity into developing countries. With the successful launch of Google Gmail SMS in Ghana, Nigeria and Kenya, users can manage their email via text message by activating a simple setting on their Gmail account. Google+ SMS also allows users to update their status via text message.

Similarly, Facebook is using SMS to extend their reach into developing countries. For example, "only" 5 percent of the population in Africa and 7 percent in Asia have access to Facebook. Meanwhile, Facebook maintains 45 percent market share in North America and 30 percent in Europe. With the mounting pressure from shareholders, these developing markets present a huge opportunity for the social giant to expand its footprint even further.

LTE will drive down the price of devices and access: a winning combination for consumers.

Today, consumers must look no further than their local Best Buy or Apple store to purchase an iPhone or SIM-free smartphone and obtain the data and access separately. LTE will only compound this trend, as mobile operators will increasingly be regarded as a data pipe. Consumers will continue to experience savings and access to new applications whilst operators will compete with each other on price, speed and better coverage. In 2013, we expect to see four distinct shifts with mobile operators:

  • Device sales will drop and margins on existing devices will narrow.
  • Operators will try to compensate for lower device sales by attracting users with "access" to their network.
  • To prevent further revenue loss, operators will focus on fostering existing billing relationships with customers.
  • Operators will be forced to "go all in" and invest heavily in LTE, weeding out smaller carriers and positioning larger operators with deeper pockets on top.

RCS-e will fail.

The goal of the GSMA's RCS-e standard aims to help operators offer OTT services such as Instant Messaging, chat, video sharing and file transfer using their existing networks. However, there are four key hurdles that we believe will prevent the initiative from succeeding:

  • Late to Market: RCS-e will be hard pressed to compete with services already being used by existing standards and platforms.
  • Little to No Differentiation: While the likes of WhatsApp and Viber have already developed their services, it will be an uphill battle for RCS-e-based services such as Joyn to match what is out there already. There is no compelling argument to switch.
  • Lack of interoperability: RCS-e requires compatible handsets and network infrastructure. As neither of these are widespread, RCS-e will not work on an international scale for some time, it will be less attractive than the existing OTT offerings.
  • Operator-Dependent Business Model: RCS-e is competing against what are now OTT brand names, which offer their service for free or a minimal charge. The dependence on operators to create RCS-e interoperability is a huge hurdle, and will likely make it economically unattractive for subscribers before services have even launched.

Cross-industry Alliances Between Web 2.0 Companies and Carriers will be on the Rise.

The lure of mobile for new media companies and vice versa will lead to a massive increase in partnerships with carriers. We have already witnessed a number of deals that indicate that this trend is already underway. Verizon now offers Skype mobile VoIP service for 3G smartphone customers while also offering mobile with video on its 4G LTE Mobile Broadband network. Messaging giant WhatsApp has also partnered with 3 Hong Kong for the provision of a WhatsApp-branded mobile data plan and roaming package. In addition, WhatsApp has struck another deal with Indian Operator, Reliance Communications to bring WhatsApp to college kids for free as part of its MyCollegePlan. Driven by the prospect of the "next big revenue-generator" in the form of mobile services and mobile advertising, in 2013 we will see many more alliances being forged across industries and through the carrier value chain.

Network Instability will continue Despite the Promise of 4G.

Consumers have an insatiable appetite for newer, faster and more reliable access to technology. But the cost of shorter technology lifecycles is usually network instability. Shorter lifecycles mean less time to recoup the operators' investment, which means less testing and lower quality. All of which point to worsening service for consumers; a true dichotomy of supply and demand. While 2G maintained its rank as the industry standard for over a decade, 3G came and went and has already reached the end of its lifecycle in half the time. Furthermore, the sheer volume of Internet-ready devices is contributing to the demise of the wireless data spectrum. As a result, smartphone users can expect to experience slower service and dropped connections.

About tyntec

tyntec is a mobile interaction specialist, enabling businesses to integrate mobile services for a wide range of uses -- from mission-critical applications to internet services. We reduce the complexity involved in accessing the closed and complex telecoms world by providing a high quality, easy-to-integrate and global offering using universal services such as SMS, voice and numbers. Our products serve a broad range of business requirements are all backed up by an advanced and reliable infrastructure. Founded in 2002, and with more than 150 staff in five offices around the globe, tyntec works with 500+ businesses including mobile service providers, enterprises and internet companies. tyntec is a global mobile interaction service provider, offering high-quality mobile messaging and information services to mobile network operators, enterprises, mobile service providers and internet companies.

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