What the leading on-demand entertainment specialists – Netflix and Spotify – will need to do the mount a serious challenge to GAFA in the top tier of Internet platforms and how telcos can help them make the online world more competitive.
Telcos and the major Internet platforms increasingly rely on each other. What kinds of agreements should operators enter into with Amazon, Apple, Facebook and Google and what should they avoid? And what are the strategic implications of supporting players who habitually use their powerful brands and software expertise to disrupt entire industries?
With iPhone sales apparently peaking, Apple is looking to double its revenue from services over the next four years to approximately US$50 billion, taking it deeper into adjacent markets, such as entertainment, financial services and communications. However, Apple trails behind Google in developing artificial intelligence and needs to extend the reach of its services to capture more behavioural data. If Apple decides to decouple more of its key services from its hardware, that would have major ramifications for Google, Amazon, Facebook and many of the world’s leading telcos.
To find new revenues, some telcos are competing head-on with the major internet players in the digital communications, content and commerce markets. Although telcos’ track record in digital services is poor, some are gaining traction. AT&T, Axiata, Reliance Jio and Turkcell are each pursuing very different digital services strategies, and we believe these potentially disruptive moves offer valuable lessons for other telcos and their partners.
The rapid growth of Facebook, WhatsApp, WeChat and other Internet-based services has prompted some commentators to write off telcos in the consumer communications market. But many mobile operators retain surprisingly large voice and messaging businesses and still have several strategic options. Indeed, there is much telcos can learn from the leading Internet players’ evolving communications propositions and their attempts to integrate them into broad commerce and content platforms. In this report we examine what opportunities still exist for telcos in this strategically important sector.
Over 5 years, BT Group’s share price has more than tripled, outperforming Apple’s and Google’s, while its revenues have shrunk. Why, and what can other telcos learn from its success?
Enthusiasm for creating novel so-called “digital” services is pervasive in the telecoms industry. There is a major shift afoot in the way telcos create, integrate, sell and manage value-added propositions. But how much is enabled by – or dependent on – the network itself? In recent years, most investment has been solely for improved connectivity, but there are signs that future network capex might drive new service opportunities directly, rather than just by empowering 3rd parties.