Gauging Mobile Performance

Performance trends and success strategies for winning in the mobile industry

The mobile industry remains attractive in terms of earnings, but operators are beginning to see a changing and more competitive environment. With more competing mobile networks per country, the emergence of virtual network operators, regulatory interventions on pricing, and continuing pressure to subsidize handsets in most markets (even the iconic iPhone), companies are feeling the pinch of declining revenues and margins. Most operators in developed markets are searching for ways to reduce their operational costs and capital expenditures to protect margins. Operators in emerging markets are employing more radical business models such as full network and IT outsourcing to make sure that they stay lean rather than add too much cost as they expand their operations.

With this in mind, A.T. Kearney has identified the most powerful cost and performance trends in the mobile industry. Using Global Cost Benchmarking (GCB)—an activity-based cost benchmarking tool to ascertain operational efficiency— on numerous client engagements since 2002, we analyzed current and historical costs, revenues and operational data. We also performed one-on-one interviews with mobile executives at our annual GCB Conference, where executives from more than 70 operators around the world share their thoughts and insights on the industry.

This paper discusses the analyses, first identifying patterns in the evolution of costs in the mobile industry and then highlighting key performance factors that mobile operators can use to improve their profitability and shareholder value.