Change the Key to Success for Operators, says PRTM

Between 2003 and 2009, the leader board of the world's 30 largest mobile operators changed dramatically, according to a report published by global management consulting firm PRTM. The report, titled The Future of Mobile Telecommunications – New Operating Strategies for a New World, identifies 19 new mobile leaders, measured either by number of subscribers or revenue. A common thread among these leaders is the continuous adaptation of their operating models to address new market conditions – crucial within a mobile industry where the game can change rapidly and where new players can quickly overtake yesterday's leaders.
PRTM's analysis reveals that the highest ranking mobile players during the past five years have revamped their operating models in ways that have led to profitable growth, support from shareholders to make acquisitions, and overseas expansion. Telefnica and Telenor are prime examples of companies that have successfully ridden the boom of mobile usage in developing countries through strategic changes to their operating models, the report notes. This same trend is evident in the emergence of large multinational operators from Russia, the Middle East, Africa and Latin America. The trend is also reflected in US market consolidation, as well as the growing importance of the leading Chinese and Indian operators. Those who have not adapted their operational models, including some major European operators, have experienced relative decline.
Ameet Shah, Director of PRTM's telecommunications practice in Europe, the Middle East, Africa and India, and lead author of the report, predicts that the mobile industry is on the verge of another dramatic transition that will tip the balance for global mobile operators once again.
We are about to make the shift to a world of mass market usage of the mobile Internet, ushering in the mobile lifestyle.' But this world is not tenable with the operating models and business paradigms of today,” says Shah. “The race is on to reinvent the mobile operator so that it can serve the new world, and the blueprint is coming into focus. The development of networks that can carry 10-100 times today's volumes, without a significant increase in operating costs, will require major capital investment, driving massive consolidation that will leave only two or three networks per country.”
Shah also believes that mobile operators must enter into a fundamentally different relationship with their customers to eliminate endless acquisition and churn, while simultaneously simplifying excessively complex and opaque tariff plans. The report argues that operators that create the right operating models will increase performance and win investor backing in the international M&A game that is rationalizing many individual operators into global groups. Consolidation during the next five years will mean an operator may need 300 million subscribers, or $50 billion in revenue, to be among the global top 10 in 2014.

Top 10 Operators by Revenues 2008 ($bn, controlled operation only, 2003 ranking in brackets)

1. (6) China Mobile – 60.16
2. (1) Vodafone Group 59.6
3. (-) Telefnica 51.56
4. (3) T-Mobile/Deutsche Telekom 50.16
5. (8) AT&T Mobility 49.34
6. (4) Verizon Wireless 49.33
7. (5) Orange/France Telecom 41.55
8. (2) NTT DoCoMo 37.38
9. (-) Sprint Nextel 30.43
10. (7) KDDI – 30.08