According to International Data Corporation (IDC) telcos have realised that they will be locked in an “unrelenting death spiral” if they fail to update their operations. “It will be entirely self-defeating if telcos believed that their traditional services had the longevity of growth,” said Adrian Dominic Ho, principal telecom, mobility lead, IDC Asia/ Pacific.
“The future telco in two to three years time should look dramatically different. It should be an entity where their traditional connectivity services should account for no more than 40% of their total revenue.”
Ho explained that service providers in the region continue to be pressured by the overwhelming weight of unfettered competition and pricing pressures across almost all their traditional services. However the ongoing transformation has gathered pace and some telcos have begun to show some “genuine nerve and bold audacity” that has allowed them to embrace the new opportunities.
The Asia Pacific region is being shaped by rapid urbanisation, fast paced demographic changes and accelerated expansion. All these factors are set to drive demand for a wide range of next-generation communications services across the region. This include facilitating governments and healthcare authorities to modernise and automate to meet the demands of their constituents, multi-national companies who are aggressively competing and expanding in the region and the affluent Asian consumer who has an insatiable demand for content.
“What will define them is how they embrace the premises of future growth that lies squarely on the trinity of cloud, mobility and digital content,” HO said.
While the opportunities for cloud and mobility have been discussed at length and continue to be major market transition, IDC points out that it is the area of digital media and content that telcos should turn their attention to, as collectively this industry will be worth over $55bn by 2016.
“Content and digital media should be the ace of spades for many telcos and it will allow them to regain the customer intimacy that they have long lost with their clients,” added Ho.
“There has been a surge in acquisition activity in the last 12 months by telcos with many willing to pay premium, underscoring the heightened expectations and realism of this.”
