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FOREWORD
Following years of digitalization in all sectors and industries,
telecommunications companies actually should be at the
forefront of this digital transformation. After all, their core
business – connectivity – provides a critical basis for the
transformation. In fact, however, very few telcos have fully
implemented digitalization in their own companies and
mined its potential. While many companies in this industry
have already digitalized individual business models, most
of them shy away from adapting their entire business to the
new digital world, or are unable to do so.
This, even though digitalization is a material threat to the
telcos’ traditional business models. The text message
is emblematic of entire revenue streams that have been
obliterated within a short time due to new technologies.
At the same time, consumers’ willingness to pay for voice
and data connections is declining. Such developments are
being spurred by OTTs, meaning companies such as
WhatsApp and Netflix that make products and services
available via the Internet, allowing them to circumvent
conventional marketing routes and pick off the revenues
of the traditional telcos. Add to this the OTT services of
equipment manufacturers (e.g. Apple’s iMessage or Facetime)
as well as the pressure from ICT service providers,
which is completely independent of digitalization. All of it
has led to a sea change in the telecommunications industry.
Conclusion: Established telcos, such as mobile and landline
service providers, mobile virtual network operators
(MVNOs), and resellers are now increasingly competing,
not just with each other, but also with companies
that have come of age in the digital era. The business
models that telcos have been following for years will have
to be revamped accordingly. Telcos will slowly but surely
lose their dominant position in the market if they fail to
both act soon in this situation and adapt their business
models to the digitalized world.
Do the established players in the telco market even stand
a chance of gaining new competitive advantages in this
ever-changing environment? Must they become more like
their new competitors in order to be able to ride the trends
of the future in digitalization? And if so, must they ultimately
redefine themselves completely if they ever want to be a
relevant market player again?
To tackle these issues, goetzpartners surveyed top executives
and C-level executives from renowned telecommunications
companies worldwide in an international study.
The study shows how the companies are reacting to the
current market developments and what they expect the
future to bring by 2020 and beyond. The findings provide
highly significant guidance for the future of telco companies
on every level of value-added services. ||
DR. ALEXANDER HENSCHEL
Managing Director, goetzpartners
MARKUS SCHMID
Managing Director, goetzpartners