Mobile service providers in developed regions of North America, Asia, Pacific and Western Europe markets could face they are no longer profitable in about four years, according to a new study by Tellabs.
Researchers looked at mobile service provider financial performance across the globe, and the fact that the study is called "The End of Profit" should tell you most of what you need to know about the fundamental trend.
See a summary here..
The study shows that widely-held industry beliefs about rising costs and falling revenues are correct. If the trends assumed in the model do not change significantly, if the assumptions are correct, and if service providers do not change, carriers in each region can expect to see an end of profit within a four year window.
That bears repeating. In the absence of relatively significant changes, mobile service provides, arguably in a better position than fixed-line providers to capture growth, will cease to be profitable within four years. The median expectation is that U.S. mobile service providers will reach "zero profitability" by the fourth quarter of 2013.
Service providers in developed nations in the Asia and Pacific region could reach zero profitability by the third quarter of 2014.
In certain regions, this point could be reached much sooner, Tellabs believes. It is clear that carriers are facing significant challenges in balancing cost and revenue. Mobile service providers in Western Europe could reach zero profitability by the first quarter of 2015.
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