Voice subsidizing data -- TM's Sani

Joseph Waring
05 Jun 2014

Wireless voice has been subsidizing data services since the beginning of wireless broadband, says TM chief strategy officer Farid Sani.

In a session on “FTTH vs LTE-A” at the FTTH Council conference in Penang yesterday, Sani said profit per minute is a lot higher than profit per bit. When mobile operations started offering wireless broadband, they didn’t foresee it being as successful as it has been nor did they foresee the rapid take up of smartphones and consequently OTT services.

“So by far the scariest OTT service is not video but voice, because you take away the high profit per minute of voice. Then a new equilibrium needs to be reached, so the price per bit will have to go up,” he said.

Wei Leping, China Telecom’s chairman of the technology steering committee, pointed out that the biggest challenge for telcos is the widening gap between traffic growth and revenue growth. In China’s case, he said traffic is growing 70% per year while revenue is increasing just 10%.

“The gap is getting bigger and bigger – you can’t survive in this kind of case. You can’t control traffic growth and you can’t improve ARPU – the only thing you can do is reduce the cost of the network.”

He expects LTE to slow growth in FTTH since low-end subs are likely to shift to LTE. “FTTH costs have to be reduced to be competitive compared to LTE.”

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