As hard as it typically is, many tier-one service providers will have to consider ways to continue “moving up the stack” into applications, or across the ecosystem into new roles, to jump on a higher-growth revenue curve. Those options might not be available for smaller specialists in the access or transport parts of the business, simply because scale is not possible.
The basic connectivity business is growing at less than one percent a year, while most other parts of the information industry (apps, hardware, devices) is growing at perhaps 12 percent annually.
Though the surest revenue opportunity remains connectivity, the big potential roles include service enablement or possibly apps, in some cases. Dial-up internet access, for example, did not produce much incremental revenue for telcos. Broadband access has driven incremental revenue, as has mobility services.
There is a difference. Broadband is mostly a “dumb pipe” service, while mobility includes voice and messaging, which are apps, plus mobile internet access, which is a dumb pipe product.
Service enablement might be an opportunity, if service providers can create valuable digital platforms for third parties, or provide system integration and content management.
Service enablement provides value by freeing developers from handling their own low-level data structure or connecting with 5G and other internet of things platforms. Little of that has developed so far in the internet era, as far as telco platforms are concerned.
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