Tony Kalcina Tony Kalcina Executive Director - Clarity

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Mobile World Congress brings no revenue relief for telcos

  • This year at Mobile World Congress I noticed a large number of smartphones being launched by vendors such as Nokia, Sony, Samsung and HTC. With the market leader Apple noticeably absent, its rivals were certainly making the most of the opportunity to promote their latest handsets as much as possible.

    But what do all these new smartphones mean to existing telecom operators? Well, we’ve seen how Apple and Google have successfully established content delivery platforms, which utilise operators’ networks without sharing any revenue for the privilege. And in the last few years we’ve seen free messaging services appear, such as iMessage, WhatsApp and BlackBerry Messenger, which are adding more pressure to mobile networks and taking away revenues previously generated through traditional text messages.

    These developments are set to increase. According to the GSM Association (GSMA), by the end of this decade there could be around 12 billion connect devices globally[i], whilst global data traffic is rapidly increasing – in 2011 we saw it more than double for the fourth year in a row.

    All of these factors are having a massive impact on operator’s revenue streams - so what can they do to survive? One thing is certain, their traditional models of building networks and charging for the applications that run on top of them are no longer a given. But at the same time they need to invest in network upgrades to meet subscriber demand for next-generation and data services. Caught between a rock and a hard place? Operators have to profit from their investments and so they need to look at reinventing their revenue streams.

    Some of the answer to this reinvention lies in monetising mobile content and services, or partnering with existing content providers to share revenue. It’s for this reason that I saw one vendor launch a new solution at Mobile World Congress that will enable operators to deploy and generate new revenue streams from mobile payment services. But this isn’t the whole answer. Operators also need to look at how they can use operational support systems to reduce operational expenditure and improve the customer experience and their profitability. One of the biggest trends we see in our market today are operators who are focused on simplifying their operations to achieve business agility, by implementing a unified IT infrastructure to support multi-technology, multi-vendor networks. By doing this they not only can reduce their cost base, they also remove many of the barriers to offering innovative products. Is this something that your own business looking to achieve? I’d love to hear your thoughts.

    Tony Kalcina
    About Tony Kalcina Tony Kalcina works as Executive Director at Clarity
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