SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMCnet FEATURE

TMCNET eNEWSLETTER SIGNUP

January 25, 2013

European Service Providers will have Another Tough Year in 2013

By Gary Kim, Contributing Editor

Since the advent of global telecom deregulation starting in the 1980s, and the emergence of the Internet in the 1990s, the global telecom business has assumed a more diverse character. Once upon a time, most service providers were quite alike, in terms of products, customers and business strategies.

Theses days, there is a growing diversity of strategies. Some service providers are getting out of the “networks” business, either outsourcing management to third parties, such as Ericsson (News - Alert), or relying on wholesale network services, as is the case in Singapore, Australia, Malaysia and New Zealand.

Some regions, almost exclusively developing areas, are seeing explosive growth of customers and revenue. Growth in most developing countries is muted, though many would note surprising resilience in the North American markets.

Europe, especially Western Europe, is going to be a trouble spot, it appears.

Dan Bieler, who tracks enterprise communication an information technology trends for Forrester Research , and Thomas Husson, Principal Analyst and VP on Forrester's (News - Alert) Consumer Product Strategy Professionals team and a specialist in the telecom space, believe 2013 will be a difficult year for European service providers.

Not many who regularly follow communications service providers, in Europe, will be surprised by that forecast. As a region featuring high needs for cross-border communications, European service providers are highly exposed to product substitution from over the top alternatives. Also, European international service tariffs historically have been quite high, though regulatory action now is reducing wholesale costs, and therefore will lead to lower retail prices.

That accounts for the significant erosion of service provider revenue in voice services and messaging, for example, which means revenue and cost pressures that will drive acquisitions, encourage cost-sharing and possibly diverging business models. Whether service providers should embrace, fight or ignore the over the top providers will be a key issue for European service providers.

But no matter which course is chosen, the Forrester Research (News - Alert) analysts believe over the top providers will continue to gain share, and displace telco services. Joyn, the carrier-supported messaging platform, probably will not be able to halt that shift, they argue.


Edited by Brooke Neuman
» More TMCnet Feature Articles

Comments powered by Disqus

LATEST TMCNET ARTICLES

» More TMCnet Feature Articles




LATEST VIDEOS

DOWNLOAD CENTER

UPCOMING WEBINARS

MOST POPULAR STORIES





Technology Marketing Corporation

800 Connecticut Ave, 1st Floor East, Norwalk, CT 06854 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2014 Technology Marketing Corporation. All rights reserved | Privacy Policy