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Trends for 2012: Western Europe

Light Reading
News Analysis
Light Reading
12/30/2011

The team at Pyramid Research , part of the Light Reading Communications Network, has looked ahead to 2012 to identify the key trends they expect to see in the coming year. Follow the "Trends for 2012" series of articles to build up a picture of what's coming down the pipe in the next 12 months.

Operator realignment across Europe will continue
Telefónica SA (NYSE: TEF)’s creation of a new business unit in September 2011, consisting of around 2,500 employees, shows the importance of new products and services to this telco giant. Telefónica Digital will group products and services such as e-health, financial services, VoIP and M2M under a single structure to better position the company for future growth. We expect a 2012 launch for its voice-and-text-over-Wi-Fi product, O2 Connect, which is just one of the areas the unit is now exploring. In a similar vein, Telenor Group (Nasdaq: TELN) also announced in the same month that it too would create a business unit to focus on digital services -- such as Comoyo, the one-stop shop for consumers on all devices, which it believes will signal the future of how we interact with and consume services. We expect further announcements of this kind in 2012, particularly from publicly listed operators that need to reassure their shareholders that they are well positioned to participate and shape the growth of a number of new products and services across the CMT industry.

'Coopetition' will become a key operator strategy
Our analysis of operator strategies across Europe points to the importance of 'coopetition' as a way of maintaining revenue and positioning in core markets, as well as rendering the core activities of voice and data provision more profitable by reducing operating and capital expenditure through partnerships with other service providers and vendors. We expect partnerships between companies such as Deutsche Telekom AG (NYSE: DT) and Orange (NYSE: FTE) to deepen and become more commonplace, although the bargaining power that they are now able to exert across their supplier base may begin to attract more scrutiny in 2012.

For more

— The Analysts, Pyramid Research

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