Australian telcos must emulate OTTs to survive

Enterprise Innovation editors
20 Aug 2014
00:00

While operators must continue to invest in network capabilities to protect their core revenue they must adapt their strategy to become more like OTT (over-the-top) players, according to IDC.

The research firm said in a new report, “Australia Mobile Services 2014–2018 Forecast and Analysis,” that it observed plateauing revenue and subscribers in 2013.

At the end of 2013, mobile services revenue was down 0.3% YoY at A$13.2 billion (about $12.3 million today) and total number of subscriptions shrank by 0.7% YoY at 28.3 million.

IDC found that as traditional mobile services revenue such as voice and SMS decline, mobile data consumption continues to climb rapidly in tandem with the expansion of 4G LTE infrastructure.

This is driven by strong adoptions in smartphones and tablets, accelerating the shift from traditional data platforms (SMS and MMS) to OTT applications (such as YouTube, Skype and WhatsApp).

There is also an increased use of online content streaming services over the internet such as video and social media. While telcos are capturing some of this increase through higher data caps, the majority of value is being captured by OTT players.

This meant that a traditional telco strategy is no longer sustainable as network investment needs increase and revenues continue to decline.

“Connectivity is no longer enough to provide revenue growth,” IDC senior market analyst Amy Cheah said. “(Telcos need) to create new streams of revenue growth by creating new business and deliver new customer experiences."

IDC expects that, in the long term, mobile subscribers in Australia will grow at a conservative CAGR of 2.4%, driven in part by the adoption of 4G services and a shift from fixed to mobile broadband as tablet adoption continues to rise.

With better coverage and faster 4G connections, IDC expects increased opportunities from businesses that are using mobile devices for specialized applications like field workers, healthcare, and retail outlets.

IDC research manager Siow-Meng Soh said that some of these applications are machine-to-machine (M2M) applications targeted at specific verticals like utilities, manufacturing, and transportation.

“Mobile operators need to form the right partnerships and train their salesforce to be able to sell mobile solutions to different verticals instead of just selling connectivity — which is increasingly being commoditized."

Related content

Follow Telecom Asia Sport!
Comments
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.