As mobile markets get saturated and core services of voice and SMS die off, telcos are going to have a significant revenue gap to fill in the next few years. Convergence, especially FMC, has been talked about for years. As fibre-broadband services gain prominence, telcos are again getting excited about FMC, and expecting it to fill the gap and deliver improved profit margins.
But, many telco convergence propositions are centred around discounting of fixed and mobile services – this is value destroying and not viable in the long term.
We believe that telcos should place content at the heart of their convergence propositions to ensure a sustainable business.
The enormous capabilities of 5G technology will magnify whatever security issues exist in today’s (3G/4G) processes and systems and people’s habits. Due to recent discussions on 5G security, people are now waking up to the risks of 5G networks. Perhaps it is good for society to have an open debate and to raise awareness of the technology shortcomings rather than to blindly walk into adopting new technologies like 5G.
In what way?
1 - Content comprises video, games and music – telcos need to team up with content partners who have content suitable for the telco’s target market as well as the right commercial model.
On the video front, native OTT services are increasingly looking like the right proposition; they appeal to both consumers as they fit in with digital lifestyles as well as to telcos because the OTT service providers tend to be more flexible on business model
For games, the reality is they take up a lot of mobile screen time but do not consume that much data, hence, the offering should primarily add value in the home setting; streaming console games from the cloud via a Set Top Box without the need to invest in a standalone console box may just well be the next big thing with Google and Amazon placing bets on this space as well as telcos like Orange, PCCW and Telefonica
Music is more straightforward with telcos offering a seamless experience between playing a music service in the home and on the go across for the household members
2 - Telco’s convergence proposition needs to explore how to deliver value and a differentiated service by bundling content with a range of devices together with different connectivity options
Pioneer Consulting Asia has developed pragmatic convergence propositions based on the needs of the telco as well as knowledge and contacts with a range of content providers. Underpinning the propositions is PCA’s proprietary research in changing consumer habits in digital services in 10 Asian countries. For further information, please contact us on info@pioneerconsultingasia.com