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A Decline In Voice Revenue Signals Time For Change

Mobile & TelcoNews
by Andreas Bernström
, 23 Sep 2011News

Voice revenues, since the widespread use of mobile phones had its beginning in 1990, has been one of the largest and most stable revenue streams for the mobile incumbents.

However, according to a recent Ovum report, this is set to change:“voice revenues, currently accounting for 69 per cent of operator income, will fall back to 60 per cent by 2016 - and that equates to a loss of some $30 billion as total revenues from voice services declines from $658 billion to $628 billion. However, revenues from mobile data services will not rise at a rate that will match, replace or overtake the voice revenue losses”.

This news is unlikely to be easy listening for operators but there are ways to weather the storm and maintain competitive advantage. Here I note the operators that are already gearing for change and a new business model suggestion for operators willing to embrace innovation.

Gearing Your Organisation For Change

Many operators have had enough foresight to identify significant external threats. Companies such as Telefonica, Telenor and AT&T are all examples of operators that have started looking into putting more emphasise on their respective innovation agendas geared towards, amongst other things, the mobile application space, something likely triggered by them recognising the opportunities in app driven eco-system business models.

Embrace Innovation and Create New Business Models

Just like in other industries subject to disruption, such as music, tides are changing, and existing dominating forces are forced to be agile, adapt to the new market conditions and respond to new consumer demands. One of the biggest areas that needs an overhaul is roaming. In the case of operators, they have, to name one, the opportunity to leverage each other’s networks at regulated wholesale prices for the benefit of lowered roaming costs. Aggressively minded operators could then create their own roaming services to maintain brand loyalty.

It does appear different operators are embracing innovation at different points of the race. However, whatever happens during this turbulent time within the telecoms industry, the consumer will emerge victorious as all signs point to operators and partners offering low-cost, and even free, calling!  

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