Will 2017 be the Year the Fixed Network Business Model Crashes?
Will 2017 be the year the global fixed network telecom business goes negative, or upside down, on a cash basis?
Yes, say researchers at the Economist Intelligence Unit. Their 2017 telecom forecast predicts that, by the end of 2017, the global fixed networks business will go negative. In other words, annual revenues will be less than investment required to operate the business.
That necessarily will start--or accelerate--a huge process of rethinking the role, scale and scope of fixed networks. Over the long term, fixed networks cannot be operated at a permanent loss, much less justify continual investment in higher speeds and capabilities, as revenue drops.
That calls into question not only the future role of a fixed network, its role and customers, but also the platform, marketing and operating costs required to sustain the business.
In simple terms, revenue no longer will cover fixed or variable costs in the business. That is a big big deal.