Globally, telcos could lose up to $172 billion from voice revenues in five years, according to researchers at Telco 2.0.
“We expect a total decline in voice revenues between -25 percent and -46 percent on a $375 billion base between 2012 and 2018,” Telco 2.0 says.
The problems include competition from over the top competitors, vulnerable pricing structures, economic pressures and societal changes.
On the other hand, Telco 2.0 argues that telcos could salvage about $80 billion by taking a new approach to retail prices and bundles, service enablement, use of WebRTC and VoLTE, creative approaches to own brand OTT services, and a greater focus on enterprise communications.
Those efforts could slow the decline of voice and messaging revenues and allow telcos to build new communications services for both consumer and enterprise customers.
The analysts at Telco 2.0 point to different market outcomes in some markets where service providers have been able to limit losses from over the top messaging services compared to others where over the top alternatives have had more success, reducing service provider revenues more significantly.
“Perhaps the most surprising thing is how effective some telco strategies have been in defending against disruptive competitors like WhatsApp,” Telco 2.0 says. “Then again, there are some markets, such as Spain, where the combination of telco pricing and economic conditions have played right into the hands of the so-called OTT Players.”
“Equally, there are some great opportunities for telcos to build new value, particularly in the enterprise market, where some of the more traditional technology companies like Cisco face increasingly disruptive competition from players like Google and Microsoft,” analysts say.
Vodafone’s first half 2013 earnings point at the problem, that revenue is falling in developed markets, and growing in developing markets.
The issue is how much can be done in developed markets, in any of the legacy markets. Few would argue that product life cycles exist, even in telecommunications, and that new revenue sources have to be developed and created.
The issue is whether “voice and messaging” are mature products to be harvested, or can be changed into new growth products.
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