Mobile Broadband Largest Opportunity For Telco Revenue Growth: Ovum

Global telecom operator revenues exceeded $2 trillion in 2012, with 60 percent going to mobile operators, finds Ovum. While overall revenue growth is expected to be minimal, Ovum believes some segments will still have above-average growth and significant incremental revenues over the next five years at each level of the value chain.

In a new report, the global analysts reveal that mobile broadband presents the single largest opportunity for telcos to claw back revenue, as forecasts show mobile broadband growing 19.2 percent annually and generating $122.9 billion in incremental revenue between 2013 and 2016. Other segments with double-digit revenue growth over the next five years include public cloud, enterprise Ethernet, IPTV, and managed/hosted IP voice.

“The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry,” commented John Lively, chief forecaster at Ovum. “Over the next 3–4 years, both fixed and mobile operators will face the same fundamental challenge: to increase new sources of revenue fast enough to offset the decline in mature services.”

More from Biztech

Future Group - Reliance Retail Deal approved by CCI RBI ban on cryptocurrencies takes effect; prohibition could force investors to tap the black market

In the consumer segment this will involve competing with new over-the-top players as well as traditional competitors. To meet this challenge, Ovum recommends adopting consumer-services marketing approaches.

For infrastructure vendors, increases in overall capital expenditures will be limited by low single-digit gains in service provider revenues. To grow revenues faster than the industry average, Ovum recommends that vendors position themselves in one or more high-potential product segments, such as converged packet optical, ROADMs, 40G/100G networking gear, carrier Wi-Fi, and network-related services.

Elsewhere, Ovum warns component makers to expect continued high volatility in market demand – higher highs and lower lows than their customers or end customers are experiencing. “This can be mitigated to some degree by forming close relationships with infrastructure vendors and jointly understanding the end customers’ needs and plans,” suggested Lively. “Plus, winning a share of 40G and 100G business will be essential to avoid being left behind by competitors.”