Telcos at crossroads in data boom era

According to research by GSMA, which represents nearly 800 mobile operators in 220 countries, the provision of mobile data services already accounts for about one-fifth of operator revenue.

This share is forecast to increase to 44 percent, or $500 billion, by 2016, and to 53 percent, or $648 billion, by 2020 – exceeding revenues from traditional voice services. The GSMA describes a growing market for connecting machines and everyday objects to the Internet, creating an overall vision of a “connected life” – in which large telecoms groups want to play the central role. At present, however, the reality is rather different. Telecoms companies have so far been made to look slow by nimble technology groups that have seen their share prices rocket on demand for digital services. By contrast, growth at major telecoms groups has been sluggish at best during the past decade’s communications boom. If the operators are able to provide additional services – such as billing, identity and security – with their customers’ data connections, GSMA projects a potential 80 percent increase in revenues in eight years: from $1,000 billion in 2012 to $1,800 billion in 2020. Otherwise, it says, revenues will grow only at about 2 percent a year, on average, across the world.