Will Fourth Wave Telco Services Be Big Enough to Offset Legacy Revenue Decline?

Sometimes market share can change for "not so good" reasons, such as the collapse of a former robust revenue model. That is the case for the U.S, newspaper and magazine industry, which has seen its revenue collapse from perhaps $70 billion in 2004 to about $40 billion in 2013.

Google has grown, to be sure, but its market share has grown principally because the other suppliers have shrunk so much. 

U.S. fixed network telcos faced revenue problems at least that great over the same period. The difference was that new revenue sources  (mobile services, broadband access, video entertainment) were available. 

All of that points out the crucial need for telcos to find the next waves of revenue, beyond mobile subscriptions (developing markets) and mobile broadband, the current growth driver in developed markets. 

And those new markets and services will have to be very big, on the collective order of hundreds of billions of dollars, on a global business, to offset what some expect will be a decline of about 50 percent in legacy telecom revenue over a decade.


Already, for example, Orange revenue growth is lead by Internet and business customer sources.

The issue is the degree to which the next wave of services can compensate for the core revenue sources at present. The industry has done so before, particularly as mobile revenues more than compensated for the loss of long distance and then access line revenues. 

But that points to the magnitude of the challenge. Something as big as mobile telephony is needed. 

Orange 2011 Revenue Growth Contributors