Analysis

Deloitte analyses top telecoms trends for 2014

14 January 2014

  • 1.2 billion messages sent every day via mobile phone in UK: text message share of volume falls to 32%, but its share of revenues is approximately 98%;
  • Text messages will generate more than £60 billion ($100 billion) in revenue, approximately 50 times all revenues from mobile IM services;
  • The fastest growing part of the smartphone market in developed countries this year will be among the over-55s.

The technology, media and telecommunications (TMT) practice at Deloitte today announces its predictions for the telecoms sector in 2014.

Deloitte predicts that instant messaging services on mobile phones will carry 50 billion messages per day globally, more than twice the number of messages sent by text. This is a rapid growth from 2012 when 11 instant messages were sent for every 10 texts.

This year’s predictions cover a range of topics, highlighting developments around instant messaging, smartphones and more rugged connected data devices.

Ed Shedd, head of Deloitte's UK technology, media and telecommunications practice, comments: “Despite the growth in instant messaging services, Deloitte expects text messages to generate more than £60 billion ($100 billion) globally. This is about 50 times the total revenues from all instant messaging services.”

Ed Marsden, lead telecoms partner at Deloitte, adds: “Deloitte predicts that the fastest growing part of the smartphone market in developed countries will be among the over-55s. Nearly half (47%) of this group will own smartphones by 2014, an increase from 40% in May-June 2013. The difference in smartphone penetration by age will disappear, but differences in usage of smartphones remain substantial. A quarter of the over-55s do not know their mobile Internet allowance and a third (33%) have never downloaded an app. Understanding the diversity of smartphones and their owners is critical to any company adopting a mobile strategy.”

Key predictions include:

Short messaging services versus instant messaging: Value versus volume
Instant messaging services services may win the battle for volume in 2014, but text messaging will be victorious in revenue terms. Deloitte expects text messaging to continue to generate significantly greater revenues than instant messaging services until 2018, by which point global text message revenues are expected to have started falling. We also expect instant messaging services on mobile phones to continue to supercede text messages and all other forms of communication, including e-mail and phone calls.
It might be supposed that the growth in instant messaging services is coming at the expense of text messages and mobile carriers. However despite the burgeoning volumes of messages carried over instant messaging services, we expect text messages to generate more than £60 billion ($100 billion) in 2014, equivalent to approximately 50 times the total revenues from all instant messaging services.

The smartphone generation gap: Over 55? There’s no app for that
For mobile operators, targeting the over 55s could be particularly effective. Carriers should ensure that all aspects of service, from the structure and explanation of tariff plans, to customer service, are appropriate for this group. All-you-can-app tariffs, which would provide unlimited access to customers’ preferred services for a fixed fee, could be offered. Network operators may wish to examine family-related propositions, for example, allowing older generations to gift air time and data bundles.

Rugged devices at £150 ($250): reinventing the business case for mobile field force
Deloitte predicts that the entry price for a more rugged and connected data device that can be used by field force workers and for tasks such as car rental check-in inspections, inspecting highways or delivering packages, will fall to £150 ($250).

The main reason for the fall in price for more rugged devices will be a shift in approach. Instead of deploying data devices that are built to be rugged and capable of withstanding rough handling, exposure to dust, moisture and hard knocks, companies will buy a standard consumer smartphone or tablet with a toughened screen and protect it by adding a rugged case.

End

Notes to editors

For a full copy of the report (launched on Tuesday 14th January) with all of the Deloitte predictions please email: Selina Abbiss or Pete German visit www.deloitte.co.uk/tmtpredictions.

The 2014 series of Predictions has drawn on internal and external inputs from conversations with Deloitte’s clients globally, contributions from Deloitte member firms’ 7,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited  (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.
 

Laura Parsons
Deloitte LLP
+44 (0) 20 7303 0885
+44 (0) 7826 952 940
lauparsons@deloitte.co.uk

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