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Telcos warned to make critical assessments of assets

A review of the full-year key performance indicators (KPIs) of 23 of the world’s largest telcos makes for somber reading as revenues continue to decline, finds Ovum. Telcos will have to make a critical assessment of their assets and...


August 1, 2013  


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A review of the full-year key performance indicators (KPIs) of 23 of the world’s largest telcos makes for somber reading as revenues continue to decline, finds Ovum. Telcos will have to make a critical assessment of their assets and operations if they are to remain profitable, the global independent analyst firm warns.

New research from Ovum examining the 2012 performance of mature, emerging and global market telcos reveals that all operators with significant exposure to Europe reported worse results in 2012 compared to 2011. The overall revenues of European telcos were substantially lower, and growth in their emerging market operations was not enough to offset the losses in their domestic markets. Telcos in Asia-Pacific and emerging markets experienced some growth but at a slower rate than in 2011.  The exceptions were China Telecom and China Mobile, which both reported significant revenue uplifts in 2012.

Although operators in Japan, North America, and South Korea fared better, the revenue growth of all operators is expected to slow down until at least 2018.

“This research highlights the need for telcos to realign their business strategies for 2013 and beyond,” explains Adaora Okeleke, telco operations analyst and author of the report. “But simply reducing costs is not the answer. Telcos need to focus on monetizing opportunities created by mobile broadband, use core assets to expand into other industries and change the telco operating model, including the disposal of non-core assets.”

According to Ovum, there are many assets in telcos’ current estates that can weigh heavily on their businesses, particularly when they involve high opex and make little or no contribution to revenues and profitability. 

“Telcos could feasibly play a role as service enablers, but they first need to adopt the leaner structures of over-the-top (OTT) players such as Google.” says Okeleke.  “By partnering with application developers and allowing them to use their secure platforms for service delivery, telcos will be able to drive innovation and reduce time-to-market.”