2016 trends Looking back at the year’s major developments, and looking forward at what this means for the year ahead
Convergence everywhere Barely two weeks into 2016 we saw the biggest acquisition the industry has ever seen; the £11 billion BT/EE deal. Four months later, Three’s planned takeover of O2 was scuppered by the European Commission, Ofcom and the CMA, with the communications regulator’s CEO arguing that a three-player market would harm competition, increase prices, disrupt network development and harm the high street. Underlying both deals is the pressure to deliver more for less as network ARPU decreases. While BT aims to provide more services and thus buck the trend, Three’s merger would have reduced costs in a similar manner to Orange and T-Mobile’s merger, which identified £445m of synergies. However, it wasn’t just networks looking to take advantage of reducing operational costs and expanding services through buyouts. In the distribution and solutions space, Alternative Networks – which until it was hit by roaming caps, had been on an acquisition spree itself – was acquired by rivals Daisy in November. Exertis also grew through acquisition with its purchases of Siracom and Medium Ltd this year, while Westcoast bought ArtSystems and Adveo Digital Systems. Dealers also joined in, with Chess, Maintel, Onecom, GCI and Cellhire all buying up rivals in 2016.
industry, but whether through choice or coincidence, it’s hard to say the same of Ofcom in 2016. The quango hasn’t just dominated headlines but determined them, by slapping Vodafone with the industry’s biggest fine to date, changing its spectrum rules, taking a firm stance on mergers, breaking up BT and Openreach, preparing switching changes, and announcing a crowd-sourced coverage checker. However, in maintaining that four networks are needed to sustain competitiveness, its opponents believe responsibility for creating an equal playing field in spectrum now falls at its feet, threatening the darling political status it enjoys by bringing in billions for the Treasury through the associated auctions.
Field Marketing Growth Brexit There are known knowns and there are known unknowns, but there are also unknown unknowns. Depending on who you speak to, Brexit seems to be all three simultaneously. Most of the effects so far have been little more than market uncertainty – currency fluctuation causing price increases such as with the OnePlus 3’s £20 jump, Microsoft’s 22% cloud service price hike, and O2’s CEO Mark Evans telling Mobile that its planned IPO could be derailed by ‘market conditions’. There’s also talk of Brexit harming investment in the UK, though there’s little evidence of this so far with 0.9% investment growth from July to September and tech giants Huawei, Facebook and Google all reaffirming their investment plans.
Common criticisms of the UK’s regulator include that it is toothless or too hands-off with the
One of this year’s most dystopian tech images came from Samsung’s MWC event, with hundreds of attendees wearing their headsets while Mark Zuckerberg strolled past unnoticed. However, 2016 had the last laugh,
with VR being the one unnoticed by consumers, with Playstation VR shipping 1.85 million less units than expected while Google’s DayDream VR fell 200,000 short of its 450,000 target. Samsung is expected to ship 2.3 million units, although mostly by giving one away with every flagship device sold throughout the year. One area of success for VR is consumer awareness: Google and Facebook both added 360 video functionality in 2016 and 64% of the UK public had heard of VR devices.
Using field-marketing staff to train, incentivise and motivate retail staff on a manufacturer’s products has been widespread in the industry for years, and our research early in 2016 showed that Samsung held a leading position, followed by Microsoft and Sony. However, by June, Microsoft had axed its entire field marketing apparatus and Huawei and Alcatel were on the rise, having launched their own retail staff training schemes in March. In October, Doro expanded its existing field marketing team, with its UK MD Chris Millington explaining: ‘Our expanded team will help to facilitate the development of new market opportunities for the industry – and deliver these into trade and retail channels, through improved education and knowledge.’ The overall growth in the field marketing teams throughout 2016 represents continued manufacturer confidence in phone shops as their primary routes to market, despite the rise of online and catalogue retail sales channels.