The revolution brought by mobile 4G

The revolutions brought by 4G mobile networks.

The 4G mobile networks have been presented as a technological change providing higher throughputs compared to 3G networks

Mobile network operators often present 4G services as a-maybe major- evolution, but still only a technical one compared to the previous 3G networks and their many variants called 3G +, HSDPA or HSPA with which the consumer was already lost. And within the flows of information provided by the mobile operators, the users mainly remember that with 4G  the access speed is much faster than with 3G: from a theoretical maximum of 7Mb / s with 3G, he can now get over 100 Mb / s while moving with 4G systems. This presentation is very reductive of the upheaval provided by 4G systems, which finally delivers the initial promises of mobile telecommunications services.

A service capable of meeting all user’s requirements

4G finally realizes the full versatility of all telecom based services: it is capable of sending SMS and at the same time  providing streaming live HD quality television programs. We knew that 4G has better performance than ADSL which throughput is limited around 22 Mb / s in the best conditions (although introduction of  VDSL2 should improve throughput largely), but 4G offers ideal conditions for the production of services in mobility without having to tinker because the bandwidth is insufficient as it used to be the case for 3G. Finally only one medium, the 4G, is capable of performing all basic telecom services requested by the user.

The example of an autonomous universe: the car

Take a meaningful example: the automobile. When we travel, the car is a real autonomous universe: the time of a journey, the driver and passengers share a small autonomous space in total mobility. We noticed that at the beginning of 2013 General Motors announced an agreement with AT & T so that all cars produced by GM from mid 2014 (for 2015 models) would be fully equipped with 4G services (GPS navigation, internet, telephony, streaming HD TV for passengers) – Sprint and Chrysler announced a similar cooperation-. The wave arrives, it will affect all of our universes (home, work); it will shake up the way we live.

The necessary evolution of network operators

Telecom operators should make sure they are not behind those promises: we remember some deceiving allegations regarding in  particular the throughput when launching new services such as fiber access: the internet interconnections were so undersized that users did not feel the interest to proceed with these technologies: what’s the point of owning a Maserati, if you can drive it on local damaged roads only? Operators will have to beef up their network infrastructure to support the data traffic flow of 4G in order not to frustrate users. Signs of investments, such as new transcontinental submarine cables projects suggest that telecom operators and their investors are not going to miss this time to market and that the network capacity will be available in due course. The major U.S. mobile operators have understood this phenomenon, as they are effectively accelerating the roll-out of 4G services throughout the country.

To reinvent the customer relationship

It is the first time ever that telecom operators have the possibility to respond to all usages of the consumer in mobility. A provider can entirely meet the needs of the market: he will therefore be able to support his customers in the long term and develop services with high added  value perceived. To go back to the example of the car, the driver certainly would not want to install a new integrated telecommunications/multimedia system every 6 months, especially if it works well, while the mobile user currently does not hesitate to replace its SIM card with a lower cost one, as  the deals proposed on the market today are functionally similar and interchangeable. This should whet the appetites of players who could take advantage of this paradigm shift:  in the case of the car, who ultimately will have legitimacy and be seen as the service provider: the telecom operator or the automaker? And for the automaker, is this evolution  not a great opportunity to re-establish a permanent and lasting relationship with its customers? This sketches a starting competition between telecom operators and experts in marketing and customer relationship (distributors and brands), who will undoubtedly renew  for the 4G the Mobile Virtual Network Operator (MVNO) model.

U.S. operators at the forefront

Five years ago, few experts would bet a dime on U.S. mobile operators in view of the complexity of the geographic  licenses, as their services appeared  more basic than the European ones. However, the operators of the New World (including South Americans) have remarkably caught up and are now far ahead(with Asians) when launching before the Europeans true 4G – LTE. They have mostly been able to attract customers and make 4G a real value, so that American consumers are willing to pay an average of more than 50 € of monthly subscription (up) *, while the French consumer only pays € 34.6 (down sharply). ** Today the U.S. operators are cash machines that will certainly grow internationally, probably in Europe, as their U.S. growth is limited due to regulatory hurdles.

The challenges for the operators

The true challenge for rich or poor operators is to understand the new world of services that opens with the 4G: develop services in a long-term relationship with the user, who will not be able to  be the service zapper he is today, if he likes the true value-added services offered to him. The question is though: are mobile operators the best able to meet the new needs and new desires of consumers and would such a role not be better performed by experts in marketing and customer relationship (distributors and brands), the way Apple has been able to take leadership in the mobile devices market?

* Financial Report Q1 2013 AT & T
** Financial Report Q1 2013 France Telecom

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