At MWC 2019, amid the new devices and the hype over folding screens, telco chief executives took to the stage to address their industry, revealing the headaches that the industry collectively endures. (For a full treatment, read WARC’s in-depth report: Telecoms: the view from the top at MWC 2019.)
The dominant term was 5G and the promises therein. But look closer at this connectivity space, and there is a problem. It has, according to Singtel CEO Chua Sock Koong, to do with the quantity of data that telcos will soon start processing as the Internet of Things (IoT) and faster, expensive network upgrades like 5G hit the mainstream. 5G alone, reckons Liberty Global CEO, Mark Fries, will cost $2.7 trillion to roll out globally. Nobody is yet sure of what the business model will look like.
“The paradox for operators is that mobile revenue growth is stagnating,” said Chua, “even as data growth takes off.” She compared the staggering disparity between data traffic, which is expected to grow by 400% by 2025, and revenue growth, which is set to slow to just 1% over the same period.
As 2017 research from Oliver Wyman showed, telcos have struggled to increase prices without consolidation, which has brought extra regulatory scrutiny in European markets. Any attempts to increase prices without consolidating has led to space opening up for challengers to claim market share.
Telcos are working to develop their capability outside of this network layer, however, with many targeting the applications layer. Certain examples stand out, offering promising models.
Turkcell, Turkey’s largest telco and one of the world’s fastest-growing, has navigated a clever path to a broader service offering by leveraging specificity.
Its browser, Yaani, is positioned as “Turkey’s browser”, which surfaces local content first to make the vast and often English-language internet more relevant to its customers. It also operates a messaging and “life” app, BiP, on which users can message and play games.
The other key case study is the diversification of Singtel. The company has expanded in the B2C space with a streaming service, Hooq, and a payments wallet, Dash. In the B2B space, Singtel has made major acquisitions in marketing, digital analytics, and even moved into cybersecurity.
Sourced from WARC, Oliver Wyman