Time to Wake up!

Joseph Waring
25 Apr 2011

The window of opportunity for telcos to transform their operations and way of doing business is shrinking fast. TM Forum chairman Keith Willetts says, 'The writing is on the wall for telcos.'

The industry has to get serious about change and understand it doesn't control the pace of change. 'It's time for telco CEOs to be more ballsy and bet the farm here. It's not the time for sitting back and watching someone else pioneer. The market is moving too fast for that. We want to see a few more mavericks and a few more leaders,' Willetts says.

Not so long ago, he noted, telcos could dictate when new services would be launched and when customers could buy them. 'Now it's time to get used to the pace of change not being set by it but by others around it, which is forcing the industry to start collaborating to fight the common enemy - becoming a commoditized dumb pipe.'

Alcatel-Lucent CEO Ben Verwaayen said at the Mobile World Congress: 'The new really is that consumers have got a lot more power than they ever had before, and they can create their own definition of authority or expertise, which is the fundamental change.'

The question is: how will operators adapt to that change?

Risky bets

The only way for mobile operators to expand their profitability is bet more aggressively for the future than their competitors, Softbank chairman and CEO Masayoshi Son said in Barcelona.

The winning formula for Softbank, he said, has been an increase in smartphones and an increase in tablets, which has led to an increase in the company's income and valuation. He plans to make big bets on the mobile internet over the next 20 to 30 years.
'Subscriber growth has stalled and ARPU is falling - dropping 42% over five years. Mobile data traffic also is growing rapidly, which means a lot more capex,' Son said.

Market values have also remained flat for the major operators over the past several years. 'Investors see the future and see no more growth in market values - that's the depressing reality.'

He explained that the 'depressing reality' of declining ARPU and slowing sub growth is based only on the number of people in the world who can own phones. 'But it's not a depressing reality, it's exciting when you look at the potential number of M2M connections and people-to-machine connections.'

He encouraged operators to make big bets on the mobile internet and transform to being data driven.


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