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Gap minding –visionary investingIt’s something of an irony, butcompeting on price is an expensivestrategy. Fighting for market sharein a saturated market with genericofferings can only result in a pricewar. The outcome is compromiseduser experience and profitability.As mobile broadband becomeswoven into people’s everydaylives, their expectations of speed,quality and availability keep rising.Network performance becomesextremely relevant.Furthermore, with intensifyingcompetition, it is increasinglyimportant for operators to createdifferentiators that are hard to copyin order to get one step ahead ofthe competition.History shows that operators, likeother businesses, can build anadvantage by being the first moverinto a new technology. People oftendon’t know they want somethinguntil they are offered it: who knewhow much we would come to relyon smartphones before the arrivalof the iPhone in 2007?Frontrunners don’t just dare togo first: leading from the front isingrained in their culture. Theyunderstand that the risk of standingstill is greater than the risk ofmoving forward.This is why frontrunners investdifferently. They align network,marketing and device strategies,and invest their money in creatinglarge gaps of competitiveadvantage that will make a bigdifference to the bottom line.Gap minding also means staying incontrol of the roadmap by avoidingquick fixes that contribute to lastingcomplexity.4

Showcasing – using quality-led marketingthat creatively shows superior performancein contexts that people can relate to,highlighting why the difference is worthpaying forTake the userperspectivecrowd-sourcing ideas at thedevelopment stage. Not only doesthis create an opportunity forinteraction, it also proves networkperformance in a real-worldsetting. Ultimately, it enablesconsumers to become advocatesof the service.Frontrunner executives take apersonal stake in their networkperformance, making it their statedmission to deliver great serviceand being accountable for doingso. This lifts performance toanother level of importance anddemonstrates true commitment.Such commitment and transparencystrengthen the company’s imageand demonstrate that brandpromises are taken seriously.VisualizethedifferenceShowcasingInteractwith usersTake apersonalstake9

Unboxing –redefiningsubscriptionWith mobile broadband, it’s moreobvious than ever that one sizedoes not fit all. Consumers havethe freedom to customize the waythey use devices, services andapps to their individual needs andtastes.People increasingly have multipledevices, and want to be able toconnect them with each other andwith their friends’ devices. Whilethese devices complement eachother, they are also competing fora share of users’ time. Operatorsneed to cater for these multipledevices while ensuring the userexperience is consistent across allof them.As applications, devices andbehaviors continue to expand anddiversify, mobile data connectivity,price models, and the systems andprocesses that support them needto evolve to keep pace.Operators are now better able thanever to differentiate their mobilebroadband offerings to cater moreprecisely to different users’ needs.However, slicing and dicingsubscription packages into everfinerofferings should not meanadding complexity – for theconsumer or the operator.This is why frontrunners havedeconstructed their traditionalsubscription packages andremodeled them into cleverlysegmented offerings which giveconsumers simple choices andincrease revenue and loyalty10

Unboxing – deconstructing packagesand rebuilding cleverly segmentedofferings that boost revenue and loyaltyover time. The balance of data allowance, connectionspeed, number of devices and scope of applicationscan be adjusted to whatever makes most sense tothe customer.Sophisticated segmentationFrontrunners are using increasingly sophisticated levelsof segmentation to meet the increasingly sophisti catedneeds of mobile users. They are going beyondtraditional price plans to introduce smart tiering, valueadd-ons, shared data plans and mobile broadbandidentities.Through smart tiering frontrunner operators offer theircustomers a choice of bundles at different pricepoints,varied in a number of dimensions (such asadditional services, time, volume, devices and speed).As the mobile market evolves, pricing is increasinglyused as a tool to manage and monetize mobile databy adapting to changing usage patterns and movingaway from ‘all you can eat’ data bundles.Smart tiering can be used to encourage customers totrade up to the next level, especially if the extra valueis available for only a small price increase. Often thepotentially high value gained by users comes at a lowmarginal cost for the operator.Frontrunners use value add-ons as a way to offervaluable additional features or enhanced performancein ways that will appeal to specific customer groups,increasing ARPU in the process. These targetedadd-ons could be content such as newspapers,market data, books, music or video, or services suchas cloud storage, video calling or parental controls.By offering users flexibility in their selection ofservices, and when they can opt out, frontrunnersreduce potential barriers to adoption.By shifting the revenue focus away from mobile accesson to devices, shared data plans encourage users toconnect more devices – tablets, laptops, dongles andmobile hotspots – and expand their mobile broadbandexperience. Frontrunners make it easy and costeffectivefor users or households to include multipledevices in their plans. They are also introducingadditional services that enhance the shared data offerand experience; for example, enabling call switchingbetween devices and ‘one number’ access to alldevices in the plan.Frontrunners have created different mobile broadbandidentities as a way of personalizing services throughaspirational branding that customers can identify with.This more sophisticated segmentation recognizes thatcustomers not only have different habits and needs,but also see themselves differently from others.People are attracted by an offering that appears to bespecifically made for them.HighDEGREE OF SEGMENTATIONLowSmart tieringConnectivityValueadd-onsShared dataplansCUSTOMER DEMAND FOCUSPersonalizedservicesApps Multi-device CustomizationHigh11

Ecosystematic –open-endedinnovationWhile today’s increasinglyinterconnected world bringscomplexity, it is also bringsa multitude of emergingopportunities for those who areready to grab them. Operatorshave a unique set of assets whichcan be put to work in new ways toensure mobility is at the center ofvalue in this new environment.Instead of existing in isolation,operators have an opportunity tobecome the focal point of what isa burgeoning ecosystem, and joinforces with third parties to drivemobile broadband innovation.In effect, frontrunners have turnedthemselves into open ‘platforms’for value creation, systematicallyinviting third-party brands tocreate synergetic experiences andbusiness models.However, it’s not enough simplyto bundle services together.Frontrunners innovate by addinglayers of service and integration toaugment user value, based on theirgreatest assets: high-performanceconnectivity, close customerrelationships and high levels of trust.The operators who have profitedmost from this approach haveopened up to adjacent industriesand captured emerging opportunitiesthrough collaboration and increasedagility in ways that minimize risk andmaximize service reach.Three ways to leveragethe ecosystemFrontrunner operators havebeen able to leverage the newecosystem in three key ways (asshown in the diagram below). Howbest to address each customersegment depends on the level ofbusiness offer diversity, and thedepth of technical integration andbusiness relationship required.For consumer segments, there isgenerally no need for operatorsto ‘reinvent the wheel’ and cobrandingand co-bundling withThe multiple ways of EcosystematicIntegratedwith 3 rd partyConnectivityas componentestablished ‘killer’ third parties,perhaps on an exclusive basis,is the smartest way to createattractive, segmented packageswith tailored connectivity. Theoperator provides the connectivityand owns the customerrelationship. By tapping into theexploding use of content andapplications via mobile broadband,operators are able to access newrevenue streams and increaseappeal. Partnering in this wayspeeds up market entry andreduces risk through the use ofmarket-tested offerings.Vertical SolutionsCo-BundingCo-BrandingOwn Services12

Ecosystematic – bundling offerings withthird-party brands to deliver a synergeticexperience, with open platforms for valuecreation based on customer relationsas assetsWhen it comes to the enterprisesegment, there is more of a needfor operators to develop andintegrate with third-party offerings,such as well-recognized, crediblecloud services, to create attractive‘bundle-to-business’ offerings.This expands the range of servicesoperators offer to enterpriseclients, helping to both attractnew customers and encouragingexisting ones to upgrade.Partnering in this way reduces theup-front investment required.Finally, for particular verticalmarkets and specialist segments,operators have an opportunity toleverage partners to create highlytargeted, value-adding verticaloffers which require greater levelsof integration and relationshipbuilding. Connectivity sits at theheart of these solutions, but avariety of other elements canbe bundled in, including cloudsoftware and storage services,content provision and security.13

Co-partnering –VisionarycollaborationStaying on top of your game inmobile broadband requiresteamwork: not just throughout theoperator organization, but alsowith key partners. A short-term,cost-focused procurementapproach commoditizestechnology, diverts energy tonegotiations rather than solutioncreation, and ultimately fails todeliver competitive advantage.This is why frontrunners keep theirtechnology partners close andcollaborate with them intelligentlySTRATEGICTRANSPARENCYSharing globalbest practiceAccess to newtechnologyLONG-TERMPERSPECTIVECO-PARTNERINGMinimize thecost of restarts– gaining early access to newtechnology before it goes mainstream,sharing global insights,incentives and roadmaps, andminimizing the cost of restarts inthe process.In these partnerships, exclusivity isnot the point; it’s transparency andforesight that count. The aim is tocreate a ’we’re in this together’culture that inspires bold movestowards a common vision ... andshares in the rewards.Alignmentof innovationroadmapsSHAREDINCENTIVESCo-funding ofearly stage trialsThe three pillars of co-partnering,strategic transparency, long-termperspective and shared incentivesare underpinned by five keyattributes:• Sharing global best practice– drawing on the combinedexperience and expertise ofboth parties by sharing andcollectively generating bestpractice at a global level, forexample through discussionforums and joint research.• Access to new technology –taking a long-term perspectiveand aligning incentives for bothparties to jointly bring newtechnology to market ahead ofthe competition, helping to buildthe operator’s reputation as atechnology leader.• Minimize the cost of restarts– maintaining a long-term,closely aligned partnershipenables both parties to avoidthe costs inherent in moving tonew providers. It removes theneed to replicate complexcustomized technologies andservices, and to establish newworking relationships. Bothsides are free to adapttechnology and servicearrangements that are mutuallybeneficial.14

Co-partnering – working collaborativelywith partners, empowered by sharedincentives, insights and roadmaps, witha ‘we’re in this together’ mentality• Alignment of innovationroadmaps – building partnershipsthat share and align innovationroadmaps to identify and realizesynergies and opportunities fromcombined efforts. This helpsboth parties plan for the futurewith more certainty.• Co-funding of early stage trials –collaborating to reduce the riskof investing in new technologies,where the result is likely to beof mutual benefit, by sharingresearch and development costsand enabling the scope of thetrial to be broadened.By working across all six GrowthCodes, frontrunner operatorshave led the way in proving howrapid growth in mobile datacan be turned into sustainable,profitable, revenue growth.They have employed bold,visionary and explorativemobile broadband strategies,underlined by superior networkperformance, in order to standout from the competition.We believe that the wholeindustry can learn and beinspired by these pioneers,and apply the six Growth Codesto their businesses to deliverprofitable growth from mobilebroadband. Let us togetherexplore your codes.15

Ericsson is a world-leading provider of telecommunications equipment and services to mobile andfixed network operators. Over 1,000 networks in more than 180 countries use our network equipment,and more than 40 percent of the world’s mobile traffic passes through Ericsson networks.We are one of the few companies worldwide that can offer end-to-end solutions for all majormobile communication standards. Our networks, telecom services and multimedia solutionsmake it easier for people, across the world, to communicate.And as communication changes the way we live and work, Ericsson is playing a key role in thisevolution. Using innovation to empower people, business and society, we are working towardsthe Networked Society, in which everything that can benefit from a connection will have one.Our vision is to be the prime driver in an all-communicating world.EricssonSE-126 25 Stockholm, SwedenTelephone +46 10 719 00 00www.ericsson.com © Ericsson AB 2014