Research Methodology Diagram

How we predict the future

"The most dangerously, hideously misused and thought-annihilating piece of technology invested in the past 15 years has to be the electronic spreadsheet. Every day millions of managers boot up their Lotus 1-2-3 or Microsoft Excel, twiddle a few numbers and diligently sucker themselves into thinking that they're forecasting the future."

Michael Schrage, Los Angeles Times

Predicting what is going to happen in the future is undoubtedly difficult ¹ . Today, typical forecasting methods deployed by research consultancies involve fitting a statistical model to historical data and extrapolating this into the future.

At CTR, we prefer to avoid the use of sophisticated statistical modelling tools and packages, but instead focus on understanding the key trends and drivers underpinning the current and historical performance of the industry and assessing the extent to which these and other factors will shape the industry in the future. We do this by consulting numerous primary and secondary sources, from reading through regulator reports to talking to professionals that work for telecoms operators. This allows us to develop a forecasting scenario which encompasses wide-ranging perspectives on the future development of the industry.

Typically our forecasts consider the following factors:

• Sophistication and geographical coverage of infrastructure within individual country markets
• State of market liberalisation and government / regulator plans for future liberalisation
• Operator strategies for service development (e.g. coverage of services, innovation of   products, pricing and bundling)
• Consumer behaviour and appetite for technology adoption
• Impact of disruptive technologies on existing services
• Socio-economic factors (trends in demographics, economic growth)
• Population growth rates

All our forecasts are sense checked both from a bottom-up and top-down perspective to produce robust and sensible projections

Note: 1 We take note of examples when predictions have been spectacularly wrong:

"Well-informed people know it is impossible to transmit the voice over wires and that were it possible to do so, the thing would be of no practical value."
Boston Globe editorial, 1865

"This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us."
Western Union, rejecting the telephone, 1876

"I think there is a world market for about five computers."
Thomas Watson, chairman of IBM, 1945

"We don’t like their sound. Groups of guitars are on their way out."
Decca Records executive Dick Rowe, rejecting the Beatles, 1962

"How can you make a business out of a search engine?"
Guy Kawasaki rejecting the CEO position at Yahoo!, 1996