Despite the run-up
in mobile revenues over the last ew years,communications revenue growth is beginning to alter as voice markets in developingcountries saturate. While the global digital renaissance has yielded pockets o success andopportunity or telecom providers, content and connectivity revenues have not oset thedeclines. How will the industry evolve over the next ve years? Will provider strategies beproactive or protective? Our research suggests our plausible scenarios and the events that would signal their unolding. More important, we outline the characteristics o companiesmost likely to succeed in each o these possible utures.
The telecommunications industry has experienced morechange in the last decade than in its entire history. In 1999,only 15 percent o the world’s population had access to atelephone; by 2009, nearly 70 percent had mobile phones. Inaddition to this phenomenal growth in mobile communica-tions, the past decade also brought steep declines in publicswitched telephone network (PSTN) voice revenues, anexplosion o over-the-top (OTT) communication services andglobal industry consolidation (see page 27 or a glossary o common telecommunications terms and abbreviations). There were even ground-breaking decisions by some Telcos tooutsource unctions as core to their business as their physicalnetworks.Fueled by rapid growth in developing countries, mobilecommunications have propped up the industry’s top line. Butnow with these markets saturating, communications revenuegrowth is stalling. Expected content and connectivity-relatedrevenues have not risen quickly enough to compensate. Although increases in mobile Internet usage oer a glimmer o hope – along with a host o operational challenges – thetelecom industry aces some serious questions: Where willuture growth come rom? How will the industry evolve?
By Ekow Nelson and Rob van den Dam
IBM research suggests that the outcomes or several importantindustry trends are highly predictable.
Conversely, we haveidentied 13 signicant variables rom a larger pool o unknowns that will also have signicant impact on the industry. The outcomes o the 13 variables are ar rom certain and allinto two main categories: potential areas o growth and thecompetitive structure o the industry. Mapping the extremes o the possible outcomes related to these uncertainties revealsour contrasting scenarios depicting what the industry couldlook like ve years rom now.
Four future scenarios
Reduced consumer spending leads torevenue stagnation or decline. Service providers in developedmarkets have not signicantly changed their voice communica-tions/closed-connectivity service portolio and have notexpanded horizontally or into new verticals. Investors’ loss o condence in the sector produces a cash crisis and elicitsindustry consolidation.