According to Research and Markets, the Internet's leading portal companies have enjoyed a stunning rise (traffic, net revenues), and have established themselves as powerful brands, thanks to a handful of extremely popular key services. Their business models rely a great deal on advertising services and distribution, for low per-unit margin but high volume markets.
So these Internet giants are working to be as big as they can, by offering an array of (possibly free) appealing services. They are battling it out chiefly amongst themselves in the services market, seeking to gain a greater share of the pie, while also destroying rival services' value by offering certain paid services for free, or at drastically reduced prices.
This ongoing battle of the Internet giants is not without consequences for the telecom industry. Concerned with creating new revenue streams, telcos can either elect to develop their own service offerings directly, or to join forces with Internet portals and act as intermediaries. These partnerships sometimes offer real opportunities, albeit varying depending on the nature of the service. The leading telecom operators, and mobile operators in particular, have been adopting very different approaches.
But portals' appetite goes well beyond fixed and mobile services, and the Internet giants could well prove a direct threat to telcos' longstanding access-centric business model. Recent developments are in fact allowing them to launch full frontal attacks on the Internet access (virtual operators, Wi-Fi), voice (VoIP), TV and mobile access (MVNO) markets.
Ironically, like a Trojan horse scenario, these new attackers are the same Internet giants who were previously taken in by the telcos in the spirit of a partnership. However, while the resulting co-branding exercises may have benefited the portal, they apparently did little to add credibility to the telco as a value-added service provider.
So these Internet giants are working to be as big as they can, by offering an array of (possibly free) appealing services. They are battling it out chiefly amongst themselves in the services market, seeking to gain a greater share of the pie, while also destroying rival services' value by offering certain paid services for free, or at drastically reduced prices.
This ongoing battle of the Internet giants is not without consequences for the telecom industry. Concerned with creating new revenue streams, telcos can either elect to develop their own service offerings directly, or to join forces with Internet portals and act as intermediaries. These partnerships sometimes offer real opportunities, albeit varying depending on the nature of the service. The leading telecom operators, and mobile operators in particular, have been adopting very different approaches.
But portals' appetite goes well beyond fixed and mobile services, and the Internet giants could well prove a direct threat to telcos' longstanding access-centric business model. Recent developments are in fact allowing them to launch full frontal attacks on the Internet access (virtual operators, Wi-Fi), voice (VoIP), TV and mobile access (MVNO) markets.
Ironically, like a Trojan horse scenario, these new attackers are the same Internet giants who were previously taken in by the telcos in the spirit of a partnership. However, while the resulting co-branding exercises may have benefited the portal, they apparently did little to add credibility to the telco as a value-added service provider.