STL Partners

Telco 2.0 Growth & Innovation

New report from the Telco 2.0 Initiative shows Telcos could lose up to $172bn from core revenues in 5 years

  • A new report from the Telco 2.0 Initiative shows that telcos could lose up to $172bn from core revenues in five years if they don’t make dramatic improvements to their voice and messaging strategies.
  • The research shows that Telcos can fight to reduce this loss by $80bn through intelligent optimisation of prices and bundles, service enablement, exploiting new standards such as WebRTC and VoLTE, creative approaches to own brand OTT services, and a greater focus on enterprise communications.

Over the next 5 years Telecoms operators face significant further declines in traditional service revenues due to so-called ‘Over The Top’ (OTT) competition, vulnerable pricing structures, economic pressures and societal changes. But telcos can still influence the ultimate outcome with intelligent strategies.

A major new report by the Telco 2.0 Initiative shows how telcos can slow the decline of voice and messaging revenues and build new communications services to maximise revenues and relevance with both consumer and enterprise customers. 

It includes detailed forecasts for 9 major developed markets (US, Canada, France, Germany, Spain, UK, Italy, Singapore, Taiwan), in which the total decline is forecast between $92bn (-25%) and $172bn (-46%) on a $375bn base between 2012 and 2018, giving telcos an $80bn opportunity to fight for. 

Scenarios vary from a $92bn to $172bn decline on a base of $375bn

The report also shows impacts and implications for other technology players including vendors and partners, and general lessons for competing with disruptive players in all markets. It looks at the impact of so-called OTT competition, market trends and drivers, bundling strategies, operators developing their own Telco-OTT apps, advanced Enterprise Communications services, and the ability to exploit new opportunities and standards such as Service Enablement, WebRTC and VoLTE.

“Perhaps the most surprising thing is how effective some telco strategies have been in defending against disruptive competitors like WhatsApp. Then again, there are some markets, such as Spain, where the combination of telco pricing and economic conditions have played right into the hands of the so-called ‘OTT Players’”.

“Equally, there are some great opportunities for telcos to build new value, particularly in the Enterprise market, where some of the more traditional technology companies like Cisco face increasingly disruptive competition from players like Google and Microsoft.” 

Report contact: Andrew Collinson. Research Director, Telco 2.0 / STL Partners

Call: +44 (0) 207 247 5003 Email: contact@telco2.net

More on the report

This report provides an independent and holistic view of voice and messaging market, looking in detail at trends, drivers and detailed forecasts, the latest developments, and the opportunities for all players involved. The analysis will save valuable time, effort and money by providing realistic forecasts of future potential, and a fast-track to developing and / or benchmarking a leading-edge strategy and approach in digital communications.

It contains:

  • Our independent, external market-level forecasts of voice and messaging in 9 selected markets (US, Canada, France, Germany, Spain, UK, Italy, Singapore, and Taiwan).
  • Best practice and leading-edge strategies in the design and delivery of new voice and messaging services (leading to higher customer satisfaction and lower churn).
  • The factors that will drive best and worst case performance.
  • The intentions, strategies, strengths and weaknesses of formerly adjacent players now taking an active role in the Voice & Messaging market (e.g. Google & Microsoft).
  • Case studies of Enterprise Voice applications including Tropo, Twilio and Unified Communications solutions such as Microsoft Office 365.
  • Case studies of Telco OTT & enterprise Voice and Messaging services such as Telefonica’s TuGo and Vodafone One Net.
  • Lessons from case studies of leading-edge new voice and messaging applications globally such as WhatsApp, KakaoTalk and other so-called 'Over The Top' (OTT) Players.

It comprises a concise executive summary, and contains 260 pages and 163 figures.

A summary of the report can be found here

More about the Telco 2.0 Initiative 

Established in 2006 by analyst and consulting firm STL Partners, the Telco 2.0 Initiative helps drive the transformation of the telecoms industry, looking in particular at new business models and service innovation. It is highly influential on the strategies of the leading players in the market. 

“Our focus is on driving transformation through business model innovation in the Telecoms, Media and Technology sector – i.e. how companies make money and grow in turbulent times.”

The Initiative publishes ongoing research into new business model strategies, and runs regular high level 'executive brainstorms' in 4 continents (Europe, APAC, Middle East, Silicon Valley). These bring senior execs in the telco industry together with their peers in other sectors (banking, advertising, media, retail, etc.) to explore new opportunities for collaborative growth. 

Research: www.telco2research.com

Executive Brainstorms: www.newdigitaleconomics.com/events

“Most of the telcos and technology companies around the world subscribe to our research, participate in our brainstorms, and use our consulting services, due to its unique focus and methodologies. We also work closely with the World Economic Forum in the area of ‘personal data’ and have a seat on their global ICT agenda council.”


Simon Torrance, CEO, STL Partners / Telco 2.0. 

contact@telco2.net

For more information on this release please contact: Hayley Brace, Marketing Director, Telco 2.0 / STL Partners. 

Call: +44(0) 207 247 5003 or Email: contact@telco2.net