Tuesday, October 23, 2012

Telco "Apps" Aside, Most of the Money is in "Access"

Gross revenue and profit margin are the reasons virtually all telco executives globally worry about the business impact of over the top applications. In the past, telcos have sold "applications" tightly bundled with a network access, network transport and switching function. 

In a broad sense, that still is true. High speed access services actually is an application (Internet access) bundled with the network access and transport functions. Video entertainment likewise is a video app delivered using the network, while text messaging also involves a text-based communication app bundled with use of the network.

And no matter what telcos do in the future, it will always be true that most of the revenue will be earned from apps that integrate use of the network. 

“Revenues from those new streams will be small in the short term and the medium term, too,” Informa & Media principal telco analyst Thomas Wehmeier says. 

Wehmeier forecasts such services accounted for just 0.7 percent of global carrier revenue ($7.7 billion) in 2012. 

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