Western European Blended Services Market Potentially Worth A Cumulative €14.0B for Carriers Over Five Years
SEPTEMBER 26, 2006 - LONDON – According to primary research conducted by Lucent Technologies, communications operators’ potential market for blended lifestyle services in France, Germany, Italy, Spain and the UK combined could reach a cumulative total of €14.0B by 2011.
Lucent projected the potential market size by surveying a targeted market sample – nearly 1,500 consumers and enterprises – across those five countries. To accurately assess interest in blended services, Lucent simulated market conditions using a leading statistical methodology known as discrete choice modeling. This method enabled Lucent to determine which blended services, consisting of key applications sets, will generate the greatest interest at which price points. The market simulation has the ability to assess likely product and service success before a product is ready for the test market.
The research objective was to identify the value, market demand and willingness to pay for blended lifestyle services – that is the inter-working of voice, video, data and multimedia applications to produce personalized services. Among the key findings:
* Twice as many consumers and enterprises are willing to pay more for blended services (inter-working or “blending” separate applications or services into a single service), than those who are willing to pay more for bundled services (a package of separate applications or services) alone.
* Early adopter consumers are more likely to be either young males looking for fresh, multiple applications to get things done or somewhat older consumers with a higher overall income (greater than €45K) seeking simple solutions for their technology needs.
* Early enterprise adopters are large, multi-location corporations seeking portability, company network access, and flexibility of communications with more emphasis on the quality rather than the price of blended services.
* Convenience is more important for very small companies (10 or fewer employees) than other enterprises, while portability and remote access to the company network are also important but not rated quite as high as with the large firms. These companies are more price sensitive and look for technology upgrades to have a more immediate impact on their bottom line.
* More than 60 percent of enterprises and consumers across five Western European countries are willing to switch providers to get blended services.
Based on survey responses, consumers’ most preferred blended service was a Family and Friends package containing key applications related to messaging, location-based and presence services, call management, calendar, and dual mode phone capabilities. Estimated revenue for Family and Friends peaked at a price of €39 a month and a theoretical 25 percent market share of the total number of individuals who prefer this service. The total consumer market for blended services is projected to have a five-year cumulative revenue opportunity of €6.6B by 2011 with an estimated 6.3 million subscribers.
Enterprises’ most preferred blended service was a Manager’s package, which emphasized communications management, containing a combination of messaging, advanced call management, conferencing, location-based services, and security applications. Estimated revenue for the Manager’s package peaked at a price of €59 a month and a theoretical 28 percent market share of the total number of individuals who prefer this service. The total enterprise market for blended services is projected to have a five-year cumulative revenue opportunity of €7.4B by 2011 with an estimated 6 million individual workers who would be subscribers.
“Lucent’s Western European primary research shows operators that now is the time to pursue the blended services market,” said John Marinho, Lucent Technologies corporate strategic marketing vice president. “The operators can benefit from increased revenue as well as a greater share of the end-user’s ”telecom wallet“ and operational efficiencies that come with deployment of an IP Multimedia Subsystem infrastructure for blended services.”
"Lucent’s study helps provide some additional, and much-needed perspective on the blended services opportunity in Western Europe. Pyramid Research sees tremendous upside potential for service providers offering blended applications around the world, said Guy Zibi, director of Communications Media Technology Research, at Pyramid.
In addition to the consumer adult research, Lucent also completed an adjunct study of the Western European Youth segment, including “tweens” (8-12 years old) and “teens” (13-17). Among its highlights, the study found that European teenagers, with the authority to spend, are more likely to expect to pay more for blended services than their parents would expect to pay. The teens also are significantly more likely than their parents to place greater importance on the “always on” feature and the ability to use voice, video, data simultaneously during the same communication session.
The consumers surveyed for the Western European research were individuals ages 8 to 65, who use mobile phones, have high-speed Internet access at home and are one of the primary decision-makers regarding communication services for the household. The enterprises surveyed were a mix of micro, small, medium and large enterprises that were not telephone service providers or ISPs, and the business contact was a purchase decision-maker.
The research, completed earlier this year, is part of Lucent’s ongoing primary market research into the demand for blended lifestyle services and also another example of how Lucent helps customers transform their networks and their business.
Lucent is sharing detailed results of the research with its service provider customers to help them tailor their service introductions for specific markets.
About Lucent Technologies
Lucent Technologies designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent’s customer base includes communications service providers, governments and enterprises worldwide. For more information on Lucent Technologies, which has headquarters in Murray Hill, N.J., USA, visit www.lucent.com.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve estimates, assumptions, known and unknown risks and uncertainties that may cause actual outcomes and results to be materially different from those anticipated and discussed herein. Important factors that might cause such differences include improper or inadequate research methodology or sampling, changing personal behaviors and preferences, technological difficulties and the risk factors detailed in Lucent Technologies’ most recent annual report on Form 10-K and other reports subsequently filed with the Securities and Exchange Commission.
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