Telcos Could Lose Up to $172B in Voice, Messaging Revenues Over 5 Years

By Gary Kim November 28, 2013

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.

 

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More

Satellite Imaging - Petabytes of Developer, Business Opportunities

By: Doug Mohney    4/11/2018

Hollywood has programmed society into believing satellite imaging as a magic, all-seeing tool, but the real trick is in analysis. Numerous firms are f…

Read More