The European operator operates in a saturated market with over 140% mobile penetration, with highly competing operators who provide telephony, internet, TV, broadband, cloud and M2M services. The market includes many active MVNO’s competing fiercely on price and putting a lot of pressure on incumbent operators. A price war and increased use of OTT services added to a very demanding customer base using multiple devices makes the market extremely competitive.
This is what is called a Red Ocean market.
The Red Ocean Strategy Canvas looks as follows:
1. Price: Competitive prices are offered by all operators. MVNO’s are very aggressive offering prices below market’s standard; which oblige incumbents to follow and adjust their offerings.
2. Services portfolio: Internet access, TV, Voice & Video calls, SMS/MMS are the main revenue streams. Operators are still heavily charging for calls and SMS. On the other hand, OTT services are eating up some of these SMS/Voice revenues. Operators are trying to stop this intruded competition by offering packages with free SMS and/or free minutes.
3. Network performance: The QoS is an important differentiator, and operators are investing more and more in 3G and the development of the new LTE network. As long as the mobile traffic demand will continue unabated, network investments will continue as well.
4. OSS/BSS investment: Operators are investing in the BSS because of the increased numbers of new services and new devices.
5. Brand: Another important differentiator; operators promote their offerings and brand through costly marketing campaigns in different Medias. They also started to be more active in the social media.
6. International calls: are still charged expensively, but for how long?
7. Handsets subsidies & SIMonly (or BYOD): In order to attract and lock new subscribers, operators are still subsidizing handsets. At the same time, in order to counter MVNO’s –who offer BYOD (Bring Your Own Device) – most of them offers what they call SIMonly package.
8. Cloud services: Mainly backup services are offered to lock in subscribers.
9. Different tariff plans: Many different tariff plans for different services and for different countries.
10. M2M: Still in its infancy but most of the operators pretend to have an M2M offering for different business domains.
And here is the Red ocean strategy canvas:
This is what is called a Red Ocean market.
The Red Ocean Strategy Canvas looks as follows:
1. Price: Competitive prices are offered by all operators. MVNO’s are very aggressive offering prices below market’s standard; which oblige incumbents to follow and adjust their offerings.
2. Services portfolio: Internet access, TV, Voice & Video calls, SMS/MMS are the main revenue streams. Operators are still heavily charging for calls and SMS. On the other hand, OTT services are eating up some of these SMS/Voice revenues. Operators are trying to stop this intruded competition by offering packages with free SMS and/or free minutes.
3. Network performance: The QoS is an important differentiator, and operators are investing more and more in 3G and the development of the new LTE network. As long as the mobile traffic demand will continue unabated, network investments will continue as well.
4. OSS/BSS investment: Operators are investing in the BSS because of the increased numbers of new services and new devices.
5. Brand: Another important differentiator; operators promote their offerings and brand through costly marketing campaigns in different Medias. They also started to be more active in the social media.
6. International calls: are still charged expensively, but for how long?
7. Handsets subsidies & SIMonly (or BYOD): In order to attract and lock new subscribers, operators are still subsidizing handsets. At the same time, in order to counter MVNO’s –who offer BYOD (Bring Your Own Device) – most of them offers what they call SIMonly package.
8. Cloud services: Mainly backup services are offered to lock in subscribers.
9. Different tariff plans: Many different tariff plans for different services and for different countries.
10. M2M: Still in its infancy but most of the operators pretend to have an M2M offering for different business domains.
And here is the Red ocean strategy canvas:
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| Red ocean - European operator |
