Service providers and consumers worldwide recently shed light on the future of telcos—as they see it—in a comprehensive survey conducted by IBM, which predicts four potential scenarios: 1) Survivor Consolidation, 2) Market Shakeout, 3) Clash of the Giants, and 4) Generative Bazaar.
The study, “Telco 2015: Five Telling Years, Four Future Scenarios,” includes more than 60 one-on-one interviews with C-level execs from 40 service providers, and 7,722 consumers from North America, Europe and the Asia-Pacific region. (Click here to view the executive summary).
What did IBM discover?
In an interview with Connected Planet, co-author of the study Ekow Nelson, “acknowledged that most operators around the world considered this a ‘glorious’ year, driven by the rapid diffusion of mobile telephony and emerging-market expansion.” So as it turns out, service providers are in general feeling positive about the current state of telecom. But as we know, past performance does not guarantee future results and how the industry ultimately evolves will weigh heavily on consumer perception and spending on telco services.
Looking beyond the current state of the telco industry, IBM’s four predicted scenarios includes the “critical (uncertain) variables” of OTT versus network-optimized content.
At Endavo, we also feel that much will hinge on how telcos respond to the pure play OTT providers, e.g., will telco deliver and monetize content delivered through enhanced OTT services on their own managed network? … what is the demand from consumers going to be for these premium services? … and can enhanced and pure OTT coexist to create value and what are the business models for these services?
In fact, telcos response to the OTT challenge is envisioned to be an important factor under the two most profitable scenarios that could emerge as the industry evolves.
Via the IBM research, consumers are telling us they can be easily persuaded by economic pressures, and will cut back on communications spending, if needed. For instance, about 33 percent of those surveyed indicated they would consider cutting mobile spending between 10 - 20 percent.
So, regardless of whether you are a rural or global telco, this study offers valuable insights into how the market could evolve.
It’s imperative to understand all factors that can be controlled and proactively addressed (and those that will demand a response because they are outside of your immediate control) and address them through your business strategy, especially those related to OTT.
There’s no crystal ball required to know telcos customers are changing, and the role telcos must play in customers’ lives is quickly changing, too. So, if your crystal ball says OTT isn’t in your future – change the channel, fast. Or get a new crystal ball.
This is how I see it. What’s your take?
Paul D Hamm
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