Malgré un environnement économique peu porteur en zone euro et l’absence d’Apple (une tradition), les analystes ont apparemment ressenti une bonne ambiance au Mobile World Congress, qui s’est déroulé la semaine dernière à Barcelone.
[cleeng_content id= »124238212″ description= »Plus d\’analyses à suivre » price= »0.19″ t= »article » referral= »0.05″]Des quelques compte-rendu publiés ces derniers jours, il ressort une volonté des autorités de régulation de promouvoir les investissements dans de nouvelles technologies (fibre). Les analystes ont en outre plutôt réagi à certaines annonces/présentations technologiques (« small cells », « Voice over LTE »…).
« The 2013 Mobile World Congress saw the industry in buoyant mood (European operators aside) and the absence of Apple was felt less than it has been for several years. Leading among the many themes relevant for the mobile operators were unexpectedly supportive rhetoric from the European Commission on regulation, smart cities and small cells, LTE/LTE Advanced and carrier aggregation (combining disparate frequency ranges to increase data speed), machine to machine, continued strengthening of the already impressive Android device range with some progress from Windows and the launch of the first Firefox HTML5 handset.
Operator calls for lighter regulation unexpectedly met with rhetorical support from European Commissioner Neelie Kroes who says the industry needs €27bn of investment. The carriers agree more investment is needed, say that Internet players should be contributing more and that regulators should recognise the trade off between fast deployment and low pricing. Although for the industry Mrs Kroes’ more positive stance is clearly a big improvement, her mechanisms for assisting are not that obvious. To us neither a “single telecoms market” nor playing at the margin with spectrum allocations seem likely to make much difference. Reversing the MTR decision looks very unlikely, MVNO pricing is largely determined commercially but there may be room for the EC to assist in improving internet peering terms. Greater market concentration could be a material help but would fly in the face of moves to increase operator numbers in France and the Netherlands. Opening up duct infrastructure for backhaul (see Towards an Open Duct Future, 26 Feb 13) and facilitating siting of small cells in busy urban centres could be of practical help.
Small cells are a hot area for manufacturers, are on deployment by Swisscom and under trial by Vodafone. This points to a radical change in network architecture which could address the need for significant increases in mobile data capacity in urban hotspots to keep the service uncongested. Commercial success when billing is based on data usage requires customers to be able to increase their usage over time, which LTE should stimulate, but which is not possible when the network cannot handle the volume. »
« Hardware differentiation main theme across smartphone launches. There were over 35 smartphones launched by branded OEMs, of which 23 (65%) are high-end (factory ASP of $400+). While there was some noise around the launch of the new Firefox OS, most OEMs chose to focus on the hardware as a differentiating feature. Screen sizes continue the trend of “bigger is better”, with several vendors also choosing to innovate around imaging.
LT trends supportive for wireless infra, still waiting for CapEx improvement outside the US. On the wireless infra market, while we note rising smartphone subs and mobile data usage are clear positives for the industry, we are still not seeing enough signs of these translating into higher CapEx plans at carriers (apart from the US) and ultimately into higher revenues for infra suppliers. Similar to the smartphone market, we now see a lot of discussions around new LTE deals. »
« As every year in late February, we attended Mobile World Congress in Barcelona and caught up with both public and private companies. This year was mostly about technology evolution rather than new break-through innovations. Strong LTE growth for 2013+, handset/smartphone commoditization entering a new phase, NFC gaining further traction and share shifts in mobile graphics were the key emerging themes. We reiterate Buy on Ericsson, Gemalto and Imagination and retain our Sell on Nokia and ARM. »
« Publicly announced telco capex raises are taking time to show up in suppliers’ revenue profile
Commentary around telco carrier capex improvement appeared more moderate than the market’s bullish expectations in light of numerous publicly announced capex raises throughout 4Q12 and 1Q13. Commentary from Alcatel (Sell) and Ciena (Neutral) in particular suggested that Europe remains challenging, and Alcatel commented on a seasonally normal slow 1Q13 in the US. We would expect an acceleration of spend in mid 2013.
Smaller cells with bigger impact
MWC showed an even stronger focus on carrier WiFi and small cell solutions than in 2012, suggesting significant acceleration this year. Cisco (CL Buy) and Ruckus (Neutral) remain well positioned to capitalize on growth opportunities. Ericsson (CL Buy) is additionally improving its endto- end (from macro to micro) portfolio aggressively, building on its BelAir acquisition. We consider Ericsson a strong competitor going forward given end-to-end capability and one of the most rounded portfolios in the market. That said, risks remain that small cells prove significantly cannibalistic to the (macro) base station supply chain over time, although we expect small cells to be mostly incremental rather than substitutive in 2013 and 2014.
Voice over LTE is here
Voice over LTE (VoLTE) is gaining momentum, with likely adoption this year in North America, Hong Kong, and Japan given increasing chipset (Qualcomm, Broadcom, ST-Ericsson) and handset (LG, Sony) availability. VoLTE is important for telcos as it can enable differentiating features such as HD voice, in-call multimedia sharing, and video calling, helping them combat the over-the-top threat. In addition, longer-term it has the potential for infrastructure savings from collapsing the voice and data networks. VoLTE is largely provided as a feature of integrated IMS offerings, but standalone vendors such as Broadsoft (Buy) may also benefit.
Carrier spending mix is moving away from hardware based infrastructure buildouts to software based capacity upgrades
Ericsson reiterated its view that leading carriers in Europe and the US are shifting their focus to capacity upgrades and the optimization of existing infrastructure in order to prioritize more profitable data traffic. In our view, this favors vendors with a high installed base (Ericsson and Huawei globally) over sub-scale vendors in Wireless such as Alcatel. »[/cleeng_content]