Among the key business challenges identified at PTC Academy were prices and share of wallet. As Grant Kirkwood, Unitas Global founder pointed out, “prices always go down; they never go up.” Up to a point, the traditional management response has been to grow volume. But that becomes a harder exercise if prices fall rapidly, and consistently.
The other problem is that demand for legacy products is falling, with demand for new products rising. In the past, that has not been too difficult to manage. Data products sold to enterprises, for example, have gradually evolved over time, and continue to do so. But that is not an existential threat.
Obviously, it is a bigger danger if markets evolve in the direction of rivals elsewhere in the value chain being able to supply the functions telcos traditionally have provided, themselves. And that was among the points made by Sean Bergin, AP Telecom co-founder. New markets like the internet of things will grow, but the value and share of revenue earned by connectivity providers is expected to decline from perhaps 23 percent of total ecosystem revenue to as little as five percent by 2025.
In part, that is because platform and application revenue will inevitably drive more of the total value of using IoT, as most of the economic value of electricity availability is driven by products using electricity; as most of the economic value of internal combustion engines is reaped by firms supplying products that use gasoline.
Still, that issue of competition from over the top apps and services can be an opportunity or a threat, said Tony Mosley of Ocean Specialists. Partnering with an OTT sometimes can work, he said. Or, firms can move into other areas of the value chain beyond connectivity services.
The PTC Academy provides management training to rising industry leaders across the Asia Pacific region and is held at various locales yearly, including the annual Septermber event in Bangkok.