How Much Will Global Telecom Revenue Grow in 2013?

Despite obvious stresses, global telecom revenue has tended to grow, in nearly every year. There tend to be dips when global recesssions occur, as in 2008, or in the wake of major market crashes, such as in the wake of the Internet bubble burst of 2000.

Global trends also are a mix of declining, flat to slow growth in developed regions, with growth in emerging markets.

Looking just at enterprise and government segment spending, 2013 looks like a one percent to two percent growth business in 2013. 

Global information technology spending is projected to total $3.7 trillion in 2013, a two percent increase from 2012 spending of $3.6 trillion, according to the latest forecast by Gartner.

But enterprise and government telecom spending actually declined in 2012, and might grow less than one percent in 2013, according to Gartner.

                      Worldwide IT Spending Forecast (Billions of U.S. Dollars)

	2012 Spending	2012 Growth (%)	2013 Spending	2013 Growth (%)	2014 Spending	2014 Growth (%)
Devices	676	10.9	695	2.8	740	6.5
Data Center Systems	140	1.8	143	2.1	149	4.1
Enterprise Software	285	4.7	304	6.4	324	6.6
IT Services	906	2.0	926	2.2	968	4.6
Telecom Services	1,641	-0.7	1,655	0.9	1,694	2.3
Overall IT	3,648	2.5	3,723	2.0	3,875	4.1

Source: Gartner (July 2013)

Fixed broadband is showing slightly higher than the overall telecom services rate. The impact of voice substitution is mixed as it is moving faster in the consumer sector, but slightly slower in the enterprise market, though, according to Gartner.

Gartner’s latest annual survey of 1,959 CIOs worldwide from all industries was conducted in the fourth quarter of 2012 and represents CIO budget plans reported at that time. It included 398 public-sector CIOs from all tiers of government around the globe.

But there will be significant regional differences. The United States, Eastern Europe, Middle East and Africa will grow much faster than Asia-Pacific or Western Europe as a whole, for example.

To be sure, other forecasts are more optimistic. As recently as two years ago some forecasters actually were suggesting global telecom revenues could double in just about five years. That now seems hopelessly wrong.

The global telecommunications industry was not immune to economic forces in 2012 that slowed growth from earlier predictions, according to Insight Research.

Spending for wireline services contracted in 2012, while spending on wireless services grew modestly.  

According to the new industry market study, telecommunications services revenue worldwide will grow from $2.2 trillion in 2012 to $2.7 trillion in 2018 at a combined average growth rate of 3.8 percent.

So Insight Research continies to be more optimistic than do Gartner or Forrester Research analysts.

Mobile subscriber growth compounded with rising usage  will raise wireless revenues by 31 percent from current levels, yet wireline revenues will remain flat until substantial economic recovery kicks in, Insight Research predicts.

Ethernet, cloud, and mobile solutions revenue will show double-digit annual percentage growth, though.

In North America, mobile revenues will grow by 35 percent and wireline broadband revenues will grow by 19 percent over current levels.

Telekom Austria and KPN Wholesale Fiber Network a Sign of "Peak Telecom?"

Telekom Austria and Dutch group KPN have formed a new optical fiber wide area network linking 35 countries, and allowing Telekom Austria to use KPN's network for its customers in western Europe while KPN can use Telekom Austria's network in central and eastern Europe.

Under some circumstances, that would simply represent another bilateral deal between two carriers with complementary network assets. But one might argue we are not seeing normal circumstances in the European telecom market. 

Since about 2008, fixed network revenues have dipped about three percent annually, while mobile revenues have declined about eight percent annually. 

In other industries, such as the oil business, similar trends (declines)  have lead forecasters to talk about "peak oil" and the corollary, the decline of oil production. In Europe, one might wonder whether we already have seen "peak telecom."

If so, and if service providers cannot quickly figure out ways to reverse the revenue declines, mergers and acquisitions are inevitable, as that is one proven way to temporarily bolster declining revenues in a declining business.

It perhaps is noteworthy that the new deal links two firms in which Mexican telecom magnate Carols Slim has investments. The new fiber network is not necessarily an indication of what might happen in the future. But given Slim's obvious interest in becoming a player in European telecommunications, an eventual merger between KPN and Telekom Austria would not be out of the question. 

Both assets could play a role in Slim gaining a foothold in the lucrative German market. 

Orange Money Expands into Retail Payments, Branded Prepaid Cards in Africa

Orange is launching mobile payment services in partnership with Visa that will extend the range of operations for Orange Money beyond “mobile payments.” Though it is premature to speculate on just how far Orange will move into the banking business, Orange Money now will be issuing its own branded prepaid cards.

Whether most mobile service providers eventually will become “banks,” at least to some degree, is one question the initiatives raise.

Rogers in Canada already is certified as a bank by Canadian regulators, though it still appears Rogers is most interested in offering branded credit card services, not undertaking broader banking operations.

That is a traditional banking function, as is the processing of money exchanges between people and institutions.

Botswana is slated to be the first country to get the new point-of-sale, online and ATM transaction options, in addition to the existing ability to use mobile phones to send and receive money and pay bills.

Starting in August 2013, though, Orange Money subscribers in Botswana will be able to use their Orange Money account to make Visa enabled payments and pay invoices at stores, international online merchants and at over 300 Visa ATMs across the country.

That moves Orange Money into the retail payments business in a new way.

Is "mobile banking" a key revenue opportunity for mobile service providers, or not? The answer is that "it depends" on what you mean by "mobile banking,” where those operations are conducted and how the business evolves.

According to a  survey by ACI Worldwide, 76 percent of Indian mobile respondents used their mobiles for mobile banking in last six months (in 2012).

Comparatively, only 38 percent of  respondents from the United States, and 31 percent from the United Kingdom said they had used mobile banking in last six months.

Obviously, money transfers are a bigger opportunity in regions where retail banking services are relatively rare, and less an opportunity where banking infrastructure is highly developed.

China, came in after India with 70 percent of users using mobile banking followed by South Africa (61 percent). The global average for Mobile Banking adoption rate stands at 35 percent of mobile users.

Where both online banking using PCs, and branch bank infrastructure are highly developed, people tend to use mobile banking to check balances or move money between accounts.

In regions where the banking infrastructure is undeveloped, and availability of PCs and Internet access is limited, people more often use mobile banking as a way to move money from one person to another, or from person to organization (to pay a utility or school bill, for example).

As you would guess, the revenue opportunity for a "mobile banking" services supplier is greater, and more direct, in scenarios where peer to peer payments are involved. As people pay fees to Western Union to move money, so mobile banking in a P2P context represents per-transaction fees that are easy to measure.

That is not the case for "softer" mobile banking transactions conducted in regions where the banking infrastructure is highly developed. In Western Europe or North America, for example, mobile banking more often is used in place of an online session to check balances, rather than as a way to move money from person to person, or person to organization.

Subscribers will need to have an Orange Money prepaid Visa card that is linked to their existing Orange Money account. The card will enable use of those funds to make point-of-sale payments at retailers and withdraw cash at ATMs, as well as make web purchases.

Other countries in Africa and the Middle East, where Orange Money is already available, will eventually offer the Orange Money prepaid Visa card as well.

Safaricom’s M-Pesa already offers the same service through Safari Pre-Pay card offered in conjunction with I&M Bank.

The moves illustrate one of the potential ways mobile service providers or telcos might diversify their core operations to replace declining voice and messaging revenues.

Mobile payments, something AT&T, Verizon Wireless and T-Mobile US now are preparing to introduce as a nationwide commercial service, is another example.

Isis, the mobile wallet service owned by the three carriers, plans its national U.S. launch before the end of 2013.

It is some measure of the new services revenue challenge now facing communications service providers in the developed regions that mobile payment and mobile banking are serious initiatives.

But it is hard to see right now just how far matters could eventually progress. What is clear is that Orange considers mobile money and possibly other mobile banking opportunities serious indeed.

CenturyLink Touts 1 Gbps

To be sure, only some users in some parts of Omaha, where Qwest Communicatons had installed fiber to the home, originally to test IPTV services, will be able to buy this 1-Gbps service. But the offer itself shows the impact Google Fiber has had in the U.S. ISP market. 

Over the long term, it won't matter so much that such "hero" services are not widely available from most ISPs. The point is that Google Fiber now is resetting consumer expectations about what a reasonable high speed Internet access offer includes. 

Google Adds Global Spell Check, Formatting Features

If you use Google Drive frequently, as some of us do, you will likely appreciate two new features:  updated spell check and more customized lists. 

The updated spell check lets you check the spelling of your entire document or presentation at once, instead of having to resolve misspellings individually. 

Google Drive also has added new presets for numbered and bulleted lists with options to change colors, sizees, and styles of individual bullets, or create customized formatting. Watch the example here. 

LTE Customers Buy Bigger Data Plans, Study Finds

Long Term Evolution (LTE) changes end user behavior, as you might have guessed. In the United States, Canada, Germany, Korea, Japan, and the United Kingdom, LTE customers buy larger data plans, though continuing to rely heavily on Wi-Fi access, but use their mobile data plans more than 3G customers.

Both those trends arguably are helpful to LTE service providers, to the extent that larger data plans generate more revenue than smaller data plans.

In Canada, more than 21 percent of LTE subscribers are on 5-Gb to 10-GB plans, compared to 14 percent of 3G subscribers. There almost certainly is an early-adopter aspect to those purchasing decisions, so the trend might be less pronounced as mainstream users start to shift to 4G services.

Still, virtually all studies show that data consumption increases when users have access to faster Internet access services. On the other hand, Mobidia Technology studies also suggest there are some natural limits to the amount of data most mobile users will consume, even on a faster 4G network.

When looking at total data consumption on a mobile, combining mobile network plus Wi-Fi consumption, users tended to top out at about 4.5 GB per month in Japan and South Korea, and 3.2 GB per month in the U.S. market.

That tends to suggest users will not exponentially and indefinitely increase the amount of data they consume, even on a faster LTE network. The amount of data consumption will tend to flatten out because there is only so much time a consumer will want to interact with mobile data sources.

Time of engagement, in other words, acts as a natural brake on consumption. That also seems to be true, at least in South Korea, for use of Wi-Fi consumption. Apparently, you can use only so much data on a handheld device because there is only so much time to do so.

South Korean LTE subscribers used less Wi-Fi than 3G subscribers, for example. In part, that might be because the faster LTE network provides a more-satisfying experience, reducing the amount of Wi-Fi consumption driven directly by the desire for a faster connection.

In Japan the share of Wi-Fi traffic, compared to mobile network access for LTE users fell from 60 percent to 51 percent, and in the United States, Wi-Fi share dropped from 62 percent to 59 percent.

LTE subscribers are using less Wi-Fi than 3G subscribers. In April 2013, Wi-Fi

represented 67 percent of all data usage of LTE subscribers versus 72 percent of the

3G subscribers.

Wi-Fi offload remains an important form of access for mobile data users, especially

for video consumption.

Apps that subscribers value while mobile, such as Google Maps, or that subscribers

want all the time and everywhere, such as Facebook, were used more by 4G

subscribers, compared to 3G users.

However, data-hungry apps, such as music services, actually saw a drop of usage over the mobile networks and an increased use of  Wi-Fi networks. That might simply reflect growing sophistication by users.

People have figured out that they can stretch their data usage allowances by shifting video and streaming music consumption to Wi-Fi. 

T-Mobile US Breaks Trend

The one development that should jump out at you, looking at net subscriber counts for U.S. mobile service providers is the change of T-Mobile US customers between the first quarter and second quarter of 2013. 

Rates of change for the other service providers largely remained in line with past performance over the last several years.


 

Mobile Commerce 11% of E-Commerce in 1Q 2013

Mobile commerce is growing, to almost nobody's surprise, up to about 11 percent of all retail e-commerce transaction value in the first quarter of 2013, up from eight percent, year over year. 

Perhaps the more surprising argument is that offers and coupons play a role in that growth. 

Coupons and offers from firms such as Groupon had been derided as an unworkable business model over the past year or two. But some now would argue that successful coupon campaigns can help e-retailers acquire customers and drive online sales. 

By 2014 the number of mobile coupon users is expected to increase to 53.2 million a year. At roughly 10 percent, the redemption rate of mobile coupons vastly outperforms the redemption rate of print coupons, which typically is about one percent.

Mobile coupon efforts also Increase offline sales and foot traffic to physical stores.

Because they are received on phones but often redeemed offline, coupons are a perfect medium for retailers to acquire consumer data.

Coupons are essentially just another channel through which to communicate with consumers. It's useful to think of coupons less as a discounting vehicle, and more a piece of content with an offer appended.

As usual, most of those benefits flow to parts of the mobile ecosystem other than the access providers or handset suppliers. But those new values increase the value of the mobile ecosystem.

 

Telekom Austria Revenues Fall 2% in 2Q 2013

Telekom Austria's second-quarter revenues fell 1.9 percent year over year to EUR1.04 billion ($1.39 billion), as the operator saw sales fall across the majority of its European markets, including a 20 percent drop in Bulgaria.

That revenue decline is part of a wider problem for European service providers, fixed and mobile, namely a continuing slide in overall industry revenues. 

As has been the case for other service providers, Telekom Austria blamed competition and lower mandated roaming rates for the revenue woes. But as you might expect, lower retail prices forced by competition are causing Telekom Austria to spend more on marketing as well. 

At least so far, there appears little danger that every service provider in a particular country will go out of business as a result of the stresses. But one has to wonder about the outcome longer term. 

Many national regulators believe a minimum of four mobile service providers is necessary to preserve competition. But Austria only has three service providers, and at least with the current business model, one might argue there is "too much" competition to support all three on a sustainable basis. 

So something will have to give. Either the desire for four national operators is an unrealistic hope, and will lead to bankruptcy for most of the suppliers, or mergers must be allowed to happen, while service providers also must learn to adapt to a harsher business model in general, as well.

And though it has happened only on a minor scale historically, one must ask what happens if bankruptcy is the ultimate fate for all of the suppliers in a given country. The traditional thinking about such a problem is that telecommunications is so vital ("too big to fail") that the government would not allow it.

But what if the government cannot itself afford to take over and operate the national network? That would be a new question in most of Europe, since in the past one might have argued that nationalizing telecom again, so the government can subsidize losses, would be a viable option. 

Under today's circumstances, that is not possible, many of us would argue. 

Something very major would have to happen--serious restructuring of the retail service and operating cost model--to create a sustainable national network post-collapse. 

The point is that there would not be a government operator of last resort option, in many, if not most, instances. 

If no operator could create a viable business under competitive conditions, it is doubtful most governments could do so, either, except, some might argue, under a return to monopoly regulation. 

Perhaps some will argue that could work. In an Internet era, perhaps the purpose of a national network is simply high-quality broadband, not voice. 

Perhaps other service providers would adjust to a scenario where there is, in some countries, no such thing as universal interconnection for voice supplied over public networks. 

Maybe some countries will not have universal fixed network access, or even universal mobile access, even as a policy goal, as hard as that might be to envision. 

Maybe fixed networks will simply be abandoned, on a universal basis, in favor of some other access method, such as mobile-only or wirelss-only modes. 

The point is that telecommunications is a product like any other, supplied by contestants working in markets that are open to some amount of competition. But in other markets, failure of some contestants tends to lead to survival of a smaller number of providers. How far will regulators allow that process to proceed? 

And what if even that process fails? It is one thing to guarantee supply. There are fewer remedies for falling demand. 

Can FCC Lawfully Do Anything; Should it Do Anything, About Time Warner-CBS Feud?

"I am ready to consider appropriate action if this dispute continues," said U.S. Federal Communications Commission Acting Chairwoman Mignon Clyburn about the Time Warner-CBS contract dispute.

But it isn't clear what actual authority the FCC actually has about a contract dispute between two entities. Some might question whether the FCC should act, even if it had any actual authority. 

Some might see an analogy to binding arbitration for two parties to a major industry contract dispute, with a strike. But it isn't clear the analogy actually applies. 

As inconvenient as it might be for some consumers to miss CBS programming for a period, such contract disputes are just that: contract negotiations. 

Nor is it actually so clear that consumer welfare, if that were viewed as the grounds for intervention, and were lawful, is necessarily best served by such intervention.

As odd as it might seem, consumers already are starting to vote with their wallets that the current value-price relationship for video subscription services finally is moving past irritation to abandonment. 

And nobody disputes the notion that Internet delivery is coming, and appears to be what consumers might prefer. 

As a practical matter, a widespread shift to Internet delivery will only come when the current product is so broken there is massive resistance to buying video subscriptions.

In that sense, even an extended blackout would ultimately provide more value to consumers by perhaps allowing the current distribution method to become even more unpleasant. 

It is logical for content owners to want to maximize their revenues, and it is rational for a retailer to take action about price hikes it knows its customers eventually will refuse to pay. 

Maybe the best long term policy, in terms of consumer welfare, is to allow the ecosystem stresses to play out. Eventually, the business is going to change, in any case. The only issue is when, and how. 

Has U.S. Mobile Market Revenue Reached its Peak?

Virtually all products have a life cycle. That implies that even industries have life cycles. In the developed world, the fixed network voice business passed its peak revenue in 2000, even though revenues and users arguably continue to grow in the developing world.

Mobile has been the global growth driver, both in terms of revenue and subscribers, for more than a decade. But that pattern already seems to have cracked in Western Europe, where revenue is expected to decline between 2010 and 2020.

And though the U.S. mobile industry has done nothing but grow (in terms of subscribers and revenues), for decades, one might reasonably assume growth is not infinite.

Growth drivers already have shifted away from voice and text messaging to broadband services.

But competitive dynamics will play a huge role in shaping future industry results. Sprint and T-Mobile US plans to disrupt the U.S. market, one might reasonably conclude, will, as a logical corollary, halt revenue growth, and then lead to a first-ever decline, if French market and EU markets provide any useful guidance.

When a market is highly saturated, competition virtually always takes the form of price competition that tends to lead to lower average revenue per account, and therefore to a smaller market overall, measured in terms of revenue.

So even though the U.S. mobile market has grown steadily for decades, revenue likely will slow, then reverse, if T-Mobile US and a SoftBank-lead Sprint manage to take market share from Verizon Wireless and AT&T Mobility.

As much as executives at Verizon and AT&T will not want comparisons to the French mobile market after the launch of Illiad’s “Free” service, that is among the likely outcomes for the U.S. market.

To wit, the French mobile industry reached peak revenues in 2010, and has been declining since then. To be sure, the French mobile market has “grown,” as measured by subscribers, or at least accounts, as measured by subscriber identity modules.

By the end of March 2012, the mobile penetration rate had reached 106 percent of the population and the number of mobile subscribers had reached 66.8 million. But mobile revenue has declined.

In the third quarter of 2010, revenue was EUR 5 billion. By the fourth quarter of 2012, despite steady subscriber growth from 60.5 million to 66 million, revenue slipped.

In five Western European countries (Spain, Italy, France, Germany, United Kingdom), aggregate mobile revenue will decline will decline between 2010 and 2020.

Global telecom revenue growth has been slowing for some time, in most markets other than emerging countries, it is safe to say. It also is safe to say the worst-hit region globally is Europe, where service providers with significant exposure to Europe reported worse results in 2012 than they did in 2011, according to Ovum analyst Adaora Okeleke.

In fact, “the primary goal of Europe’s telcos is to stabilize their performance,” said Steven Hartley, Ovum telco strategy analyst. As is the case for other service providers facing maturing legacy revenue streams, European service providers face the challenge of growing new revenues in emerging markets faster than revenues decline in their core European markets.

And the problem there is that average revenue per user will be lower in the new markets. So European carriers are losing high gross revenue and higher margin customers while trying to gain lower gross revenue, lower margin customers.

Ovum forecasts that global telco revenue growth will slow to a compound annual growth rate of two percent between 2012 and 2018. Most of the actual growth will happen in emerging markets, while revenue is likely to stay stuck in a declining mode in Europe.

The reaction of Canadian mobile operators to a rumored entry by Verizon Wireless into the Canadian market likewise suggests mobile operators know precisely what would happen should a powerful new competitor try to shake up an existing market, namely significant market disruption.

The bottom line is the the U.S. mobile market, despite continuous overall revenue growth for decades, is likely to stall, then reverse, to the extent that T-Mobile US and Sprint are able to take market share from Verizon Wireless and AT&T.

Security Concerns About Mobile Commerce Might be Quite Wrong

Though many have been cautious about prospects for mobile commerce and payment systems because of security issues, some think smart phones actually will prove to be far more secure than most password-protected operations.

That might not allay all concerns, but does suggest we are yet early in the process of figuring out how mobile commerce actually provides huge value, and supports huge ecosystems of value. 

As it is starting to appear, smart phones are becoming a more valuable part of any multifactor authentication process, as the smart phone is the device most people carry with them always, and is a logical device for biometric assessment. 

Leaders and Managers: Followers Create the Former, Power the Latter

For the typical person involved with any sort of work-oriented organization, the difference between managers and leaders will be a subtle thing, if most people even can describe the two types of roles precisely. 

Some might say the difference is between informal and formal forms of management. The president of the United States "leads" by formal mechanisms. He or she has power, the authority to command, by virtue of holding an office. 

CEOs, priests, legislators, judges or any other officials you can think of who have power by virtue of holding an office provide other examples of formal power. 

Anybody who has been in combat knows there is another type of authority, exercised informally, irrrespective of rank. That is a classic case of "leadership," which might be said to be an informal source of power, not granted by rank or office. 

Other examples often occur in voluntary organizations, where some people exercise leadership by personal traits or charisma that are unrelated to any formal title or official role. 

One can "manage" without charisma or personal authority, because of the "bureaucratic" grant of authority of office. 

One cannot "lead" without the ability to inspire informal assent to one's leadership. Paradoxically, leaders are those whom followers designate, and not those whom the formal structures of power designate. 

Managers and leaders are not identical concepts. 

In a formal sense, one must follow legitimate orders of a manager, executive, judge or other official because that person has the legal or institutional authority to issue an order to you.

Leaders get followed because people trust the leader's authority, expertise and personal and charismatic traits. In some cases, a leader has no formal grant of authority save that granted by the followers. 

And the two types of authority can be mixed, in most cases. Conceptually, one can lead without managing, in the specific sense of exercising genuine authority without formal designation (think of sergeants, petty officers or corporals in small group combat, especially when the lieutenant has been killed).

 It is possible to manage without leading (we do what you say because you have the power to order us to do those things). One can be a "poor" manager, but still be a manager, in terms of formal authority. 

In some cases, a manager might also be a leader (we follow because we believe in you, not just because you have the right to command). 

In other cases, followers designate their own leaders. That is why successful commissioned officers rely on their non-coms. 

You might argue the most successful authority figures are those who have both legal power and the informal assent of those they lead. "Office" confers power. It does not confer active assent or enthusiastic and creative support.

Volunteer organizations routinely rely on informal leadership; they have to. Large enterprises normally are managed. 

Market Disruption is a Game Verizon Can Play as Well

One often tends to think that big market disruptions are caused by small, upstart firms. History might suggest something quite different.

You might argue that it actually takes a large and dominant firm to truly disrupt a big market. Apple, for example, did not just revolutionize "mobile phones." It changed the relationships of power and value within the mobile industry, shifting power to handset providers and away from access providers.

Some would argue it will take a firm as big as Google, able to launch Google Fiber, and offer symmetrical 1-Gbps high speed Internet access, at $70 a month, to change the U.S. ISP business. 

In similar fashion, you might argue it took an industry as large as the mobile phone business to rapidly bring voice communications to billions of people who still do not have access to fixed network voice. 

And even though lots of firms are trying to disrupt the U.S. mobile business, one might argue it will take firms as big as Sprint and T-Mobile US (or Apple, Google, Amazon, Facebook) to really shake things up. 

So the notion that a big incumbent cannot disrupt a market is false. Consider what Verizon might do in Canada, where regulators want Verizon to enter the market, and the Canadian mobile carriers with 90 percent market share are vigoruously opposing the move. 

The point is simply that big markets get disrupted by other big firms, not start-ups. One is tempted to point to Skype as a countervailing example. But that analogy also is complicated. One might argue that landline voice has been disrupted most by mobile.

International calling has been affected by Skype, but there also are other pressures, such as rapidly declining international and national long distance rates, even before Skype launched. In fact, it was competition by big long distance companies such as MCI and Sprint that caused the drop in long distance prices, long before Skype was thought of. 

That is why it really matters when firms such as T-Mobile US, Google, Apple and Sprint get serious about challenging the prevailing market structure. That is typically what it takes to disrupt a market. But add Verizon to that list of names. 

How Strategic is Ownership or Operation of an Access Network?

For a very long time, one vital "core competence" for a fixed network telco might have been said to be its right to operate a monopoly access network. By definition, a legal barrier of entry to all other competitors is a rather notable advantage. 

But the value of that advantage is challenged under competitive conditions. When there are at least two ubiquitous fixed networks, or two or more broadband networks, plus mobile, fixed wireless and satellite access providers, one might argue the uniqueness of any access network is lessened, and presumably therefore the value of owning any single set of network facilities.

Few competitors would argue that network ownership is an insignificant source of advantage. But contestants might disagree about the extent of value, in a competitive market. And that also speaks to new questions about "core competence," which also relates to strategic business value.

What is a telco's core competence? It is a tougher question that sometimes seems to be the case. A core competence is not just "something we are good at," but a unique attribute that provides significant business advantage.

Some would say the three key attributes include: 

1. It is not easy for competitors to imitate.
2. It can be reused widely for many products and markets.
3. It must contribute to the end consumer's experienced benefits and the value of the product/service to its customers.

For that reason, the question now is asked with reference to network sharing agreements that have become more common in the mobile business. 

To be sure, one might argue such network sharing is and also somewhat involuntarily agreed to in the fixed network business, where mandatory wholesale policies and steep wholesale discounts are a feature of the regulatory landscape. 

But network sharing, where two or more competing mobile service providers agree to share towers or radios, for example, provides the more-challenging questions about the strategic value of networks. 

The Czech units of Telefonica and Vodafone could be on the verge of entering into a network-sharing agreement that is said to lower Telefonica's costs by more than CZK 4 billion (€155 million) over 15 years.

The natural question is the value of a mobile access network. Does it provide a unique advantage? Some service providers that have outsourced towers or even operations of the radio network seem to be saying that the network does not, in fact, provide unique value. 

One wouldn't want to stretch the argument too far. The use of the radio network also implies use of the spectrum, which might not be a completely unique asset, but certainly is not easy for competitors without spectrum to emulate, and is reused widely for all of a mobile service provider's products. 

One might argue that spectrum also contributes directly to an end user's experience. In those senses, spectrum, more than tower networks, might be said to provide a core competency. But that would be a rather "passive" source of advantage. 

Rights to use spectrum mean only that a service provider using licensed spectrum can afford to buy it. No particular operational or marketing skills are inherently involved. 

Scarcity remains a valuable attribute of spectrum-based and wire-based networks, in many or most cases. But just how valuable is a new question, as mobile operators start outsourcing or divesting assets related to spectrum, such as radio networks.