STL Partners

Telco 2.0 Growth & Innovation

Voice telephony: death or glory?

Here we review the key business opportunity in the core voice and messaging business, and explore some of the future business model scenarios.

Telcos have consistently abandoned their core product, and are ignoring new business models, whilst pursuing fools’ gold in media content.

The timing of this discussion is rather apposite. Despite our belief in Vodafone’s long-term strength, they have just announced that their core voice business has stagnated:

The performance of the company’s European operations suffered from the tough economic climate with margins decreasing from 38.2% to 36.2% on revenues that were down 1.1% on an organic basis. The company blamed ongoing price pressure on core voice and messaging services.

As we said before, if you don’t improve your core product at all since launching digital networks, and assume two-sided Internet business models won’t have any effect on you, you get all you deserve. Please see our Voice & Messaging 2.0 report.

Members of our Telco 2.0 Executive Breifing Service can here to read more.