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Telecom Business Review | Monday, August 22, 2022
With the introduction of 3G and then 4G technology, telco operators, who provide the connectivity that other industry players depend on, lost more and more ground.
FREMONT, CA: Telecom operators have spent a lot of money to keep up with new technology over the past years, and their core business has become more as other businesses and growth has slowed. Most of the value created in the industry has been taken by edge players, which are companies that make phones, make apps, build infrastructure, or offer streaming or other digital services. Whether looking at revenue, earnings, or market capitalization, big streaming and digital service companies like Netflix, Amazon, Facebook, and Apple are doing much better.
This changed market scenario allows operators to employ critical assets in non-core activities. Their consumer base gives them call history, app usage, data consumption, and payment history for millions of customers and often entire households. Many clients remain loyal to a single operator, as this data and customer connections often span years. Rich data allows for accurate consumer profiles, behavioral forecasts, and hundreds of microsegments, enhancing targeted marketing and reducing client acquisition expenses.
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Marketplace
Tech businesses' global reach is an advantage. For instance, Netflix is available in 190 countries and Uber in 70. Infrastructure and investments limit operators' market reach. As the digital services market evolves, more startups are developing to offer localized alternatives to the global giants' services. Numerous new video streaming sites offer local-language material in countries with their official languages. A carrier looking to expand beyond connectivity no longer needs global reach.
Technological know-how
Leading tech players got their pick of the top technical expertise needed to design novel solutions, leaving telecoms playing catchup for years. Technological know-how shouldn't stop operators from starting digital firms. Cutting-edge innovation depends on outstanding personnel. But tech talents aren't as scarce as they previously were. Modern tools and technologies make developing digital services easier. A few developers can construct and release an app in months, a task that once needed massive teams of top technical talent.
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