Skip to main content

Mobile Service Providers Evolve their Business Model

With profit margins under pressure, most telecom service providers are already considering dramatic cost reduction plans in the new year, such as the immediate adoption of open source software and the piloting of SDN or NFV projects.

In particular, mobile service providers are most at risk. This is why they are in the process of evolving their business model -- primarily, in response to the latest global trends in mobile personal communications.

Juniper Research has found that with combined annual mobile network operator expenditures now in excess of $800 billion, several leading service providers face the possibility of costs exceeding revenues by the end of the decade without remedial action.

According to their latest worldwide market study, a combination of flat revenues from traditional services combined with surging data traffic costs could ultimately threaten the viability of all mobile network operations.

In an analysis of 12 international mobile network operators, Juniper found that profit margins had fallen by an average of 6.4 percent over a three year period, with 5 of those surveyed experiencing decreasing margins in every year throughout the period.

Furthermore, a number of major mobile network operators now have single figure margins -- with costs currently increasing at 1.5-2 percent per year, the situation is unsustainable in the longer term.


Meanwhile, the Juniper study found that without more widespread network optimization and the implementation of other cost controls, the situation could become critical in a number of developing markets.

Juniper believes that with surging mobile Internet adoption in the Indian Subcontinent, regional operators could see data costs outstrip data revenues by $45 billion within 3 years unless networks are fully optimized.

However, they also pointed to a number of success stories, particularly in the U.S. market, where service providers such as Verizon and AT&T have bucked the trend in falling margins by introducing shared data plans.

It observed that Verizon had seen wireless revenues increasing by more than 7 percent despite operating in a saturated market, while AT&T now had more than 14 million households on shared plans.

That said, service providers need a comprehensive strategy to adapt their current business model to the realities of the disruptive changes in the marketplace. Pricing plans aren't a long-term solution to the apparent challenges.

"Given the threat from Over-The-Top (OTT) VoIP and messaging services to core service revenue, the U.S. emphasis on focusing the value on the data element is absolutely the right way to go. This is particularly true within an increasingly 4G environment," said Dr. Windsor Holden, head of consultancy and forecasting at Juniper Research.

Popular posts from this blog

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Global Pandemic Accelerates the Evolution of Transportation

Given the current trends across the globe, organizations that depend upon the continued growth of personal vehicle ownership will need to consider a plan-B scenario. While some companies will be able to adapt, others may find that their traditional business model has been totally disrupted. According to the latest worldwide market study by Juniper Research, Mobility-as-a-Service (MaaS) will displace over 2.2 billion private car journeys by 2025 -- that's rising from 471 million in 2021. Juniper believes that for MaaS to enjoy widespread adoption, subscription or on-the-go packages need to offer a strong combination of transport modes along with feasible infrastructure changes, high potential for data collection and low barriers to MaaS deployments. Mobility-as-a-Service Market Development The concept of MaaS involves the provision of multi-modal end-to-end travel services through a single platform by which users can determine the best route and price according to real-time traffic