The telecommunications industry has experienced more change in the last decade than in its entire history. In 1999, only 15 percent of the world’s population had access to a telephone; by 2009, nearly 70 percent had mobile phone subscriptions. This decade has also brought steep declines in public switched telephone network (PSTN) voice revenues, an explosion of over-the-top (OTT) communication services, phenomenal growth in mobile communications, global industry consolidation and even ground-breaking telco decisions to outsource their networks.
Fueled by recent rapid adoption in developing countries, mobile communications have propped up the industry’s top line. But now with these markets saturating, communications revenue growth as a whole is beginning to stall, and content and connectivity revenues have not risen quickly enough to compensate. Although increases in mobile Internet usage offers a glimmer of hope, the telecom industry faces some serious questions: Where will future growth come from? How will the industry evolve?
Our research tells us that several trends are clear, each with a high probability of a specific outcome. However, a number of critical variables will also have a major impact and will play a large role in determining the predominant operating model for the industry over the next five years. Four distinct scenarios are possible, depending upon how the forces and variables play out.
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Communications Lead, IBM Institute for Business Value
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