Communications Service Revenues at $739 billion – Why Should We Worry?

Written by on July 12, 2013 in BillingViews, News with 0 Comments

Our industry is constantly worrying about its future. The general feeling out there is that we are shuffling towards the edge of a cliff. So if someone stood up at a conference and said, “Overall, the wireless industry remains resilient and continues to perform above expectations…” we might be forgiven for laughing. But so said Stefane Teral principal analyst for mobile infrastructure at Infonetics in a research note. And with communications service revenue at $739 billion for 2012, Stefane would seem to be right. It is only Europe where revenues have fallen, held back by regulation – mainly the roaming question – and the continuing squeeze on disposable income.

The point, though, is that much of the industry debate centres on the distant future. So are we right to worry about the future of telecoms? With mobile data revenues increasing and Infonetics predicting an incredible 55 percent compound growth rate up to 2017 in LTE network roll out, surely we can have a little rest on those laurels.

Except that the price war in the commodity end of the communications market is already underway. As more than one operator attendee said at the recent ETIS Billing Working Group meeting, now it is all about data. All across Europe the commodity elements – voice and texts – are being bundled and all you can eat voice and text packages are as low as 7 euros per month, maybe lower. So now the focus moves to ‘data’.

The initial moves in the ‘data’ market are on trying to equate speed and quantity with value. Thus a few gigabytes and fast access to it is what customers want, operators believe. They may be right in the short term but the question is ‘for how long?’ With voice and data now commodities, how long will it be before everyone has fast access to more data than they could possibly need? My guess is that this window is about two years, maybe less.

That is why our industry is wondering about the value proposition beyond speed. We see OTT players arriving and offering value based services – on the basis that their version of data is Facebook or Google + or Games, to which we can all relate. In our industry, we all struggle with the term ‘data.’ The OTT players do not. The best we can come up with at the moment is ‘the ability to get lots of my stuff, fast.’

As our industry, in response, tries to figure out how to offer non telco services and wonders whether bundling them with zero tariffs for access to certain services is the answer, the billing community will need to work out how to bill for non-telco services.

 

 

 

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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