Biggest Change: 1990-2010

Industry executives
23 Apr 2010

Outsiders in a telco world 

The acceleration in the kind of competitors coming into what people felt was traditionally the telco space. This has driven a new competitive atmosphere, a new challenge to operators to either become more efficient and focus on the customer or become dinosaurs and die. There's been a tendency in the past for telcos to focus too myopically on the network, which is just one part of the story.

For example, Google is coming in and investing in cable systems but they're not providing network services to anybody - they're driven by marketing and eyeballs and advertising, and they're building or investing in infrastructure where they think they need more capacity or speed or lower costs to drive that core business where they really make their money.

- Byron Clatterbuck, SVP of Global Transmission Services, Global Carrier Solutions, Tata Communications

From convenience to necessity

The way in which the world communicates has changed more in the last decade than in all history.

In 1999, more than a century after its invention, fewer than one in six people had access to a telephone of any kind. Now seven in ten people have a mobile phone. According to an IBM survey, after their homes most consumers list mobile and broadband as the next two essentials they are most unlikely to give up. In emerging markets, the mobile has even become the single most transformative tool for development - delivering public information and advisory services to rural communities as well as mobile payments and money transfer services where banking services are relatively under-developed.

- Rob van den Dam, Global Telecommunications Industry Leader, IBM Institute for Business Value

ARPU drops, penetration soars

The most significant development in Asia-Pacific telecom market is the shift in the business model, with tariffs plunging and penetration soaring. The business model has changed from high ARPU, low penetration to low ARPU with significant growth in penetration. Between 2004 and 2008 on average, ARPU for APAC has gone down by about 35%. Meanwhile, penetration has increased 57% annually (from 2000-2008) while the average ebitda margin is still at a health level of 40.8% (2008).

In Indonesia the most significant change was the shift from coverage to price. In addition, open regulation allows more competitors to enter the market. This allowed the cost of communication to decrease significantly from one of the most expensive to one of the cheapest in the world.

- Hasnul Suhaimi, PT XL Axiata president director


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