Mobile broadband will be biggest revenue generator for telcos up to 2016

3 Jan 2013

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As telcos across the world embrace 4G, mobile broadband represents the biggest opportunity for revenue growth for telcos until 2016, according to analyst Ovum. Global telecoms operator revenues exceeded US$2trn in 2012, with 60pc of this going to mobile operators.

Ovum asserts that mobile broadband is the single largest opportunity for telcos to claw back revenue.

It forecasts mobile broadband growing 19.2pc annually and generating US$122.9bn in incremental revenue between 2013 and 2016.

Other segments with double-digit revenue growth over the next five years include public cloud, enterprise Ethernet, IPTV, and managed/hosted IP voice.

“The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry,” comments John Lively, chief forecaster at Ovum.

“Over the next three to four years, both fixed and mobile operators will face the same fundamental challenge: to increase new sources of revenue fast enough to offset the decline in mature services.”

Telcos will have to compete with new players

In the consumer segment, this will involve competing with new over-the-top players as well as traditional competitors. To meet this challenge, Ovum recommends adopting consumer-services marketing approaches.

For infrastructure vendors, increases in overall capital expenditures will be limited by low single-digit gains in service provider revenues.

To grow revenues faster than the industry average, Ovum recommends that vendors position themselves in one or more high-potential product segments, such as converged packet optical, ROADMs, 40G/100G (40 to 100Gbps Ethernet) networking gear, carrier Wi-Fi, and network-related services.

Elsewhere, Ovum warns component makers to expect continued high volatility in market demand – higher highs and lower lows than their customers or end customers are experiencing. “This can be mitigated to some degree by forming close relationships with infrastructure vendors and jointly understanding the end customers’ needs and plans,” suggests Lively.

“Plus, winning a share of 40G and 100G business will be essential to avoid being left behind by competitors.”

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com