"Connectivity is Not an Asset?"

The challenge of avoiding a low-margin, dumb pipe role in the internet ecosystem remains a key strategic  issue for executives running telecom, internet service provider or mobile services firms, as does the product maturation affecting all legacy telecom services (voice, messaging, internet access, linear video services, legacy business access services).  

In addition, it remains unclear whether mobile data can be monetized on a sustainable basis, whether spectrum rights actually create a sustainable advantage, or whether access “users” actually will remain “customers” forever.

“Connectivity is not an asset,” said Alexey Reznikovich, Veon (VimpelCom) CEO. Few internet service providers, mobile operators or telcos likely agree, in a literal sense, since “access” and “subscriptions” literally are the foundation of the business and the specific role within the communications and internet ecosystems.

So take the Reznikovich statements as slightly hyperbolic warnings to “add value” to the access business. Up to this point, that process of adding new value and revenue sources has worked. Fixed network voice was replaced by mobile voice; then mobile voice augmented by text messaging revenues. Later, maturing mobile voice and texting revenues were supplanted by mobile data services.

But Reznikovich raises a key issue: will mobile data actually drive profit? There are two angles. First, whether mobile data access services are--and can remain--profitable in their own right. The second question is whether service providers can create new roles in mobile apps and services, with value and revenue streams to match.
Post a Comment

Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

Who Are the Key Telco Competitors?

Jio is Succeeding at "Destroying" the India Mobile Market