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New study forecasts $416bn worldwide broadband access market, as operators adopt "Happy Pipe" strategies London – June 16th 2010 Both fixed and mobile broadband markets will continue growing in revenues, up to $416bn in 2020, but operators face some hard decisions about future business models, according to a new study published by the Telco 2.0TM Initiative and co-authored by research & consulting firm Disruptive Analysis. The new report, “Mobile, Fixed & Wholesale Broadband Business Models: Best Practice Innovation, ‘Telco 2.0' Opportunities, Forecasts and Future Scenarios” finds that telecom operators will benefit from both new types of broadband wholesale, and more sophisticated direct-to-user retail propositions and tariffs. Recent introductions of new tiered and capped wireless Internet data plans are early evidence of this trend. Key findings from the report include:
Today, many operators fear the supposed risks of becoming “dumb pipes”, but the study suggests the forecast market value means the term “happy pipe” is more appropriate for some. Certain telecom carriers will be able to add further value through enhanced “Telco 2.0” value-add services and platforms, but it is important to note that the basic carriage of data can itself be profitable and a source of substantial growth. On the conventional retail broadband side, the big winners are fibre-based fixed services and mobile data plans for smartphones. Global ADSL and cable revenues will peak in mid-decade, and then decline with substitution from the progressive deployment of fibre. PC-based mobile broadband retail revenues will grow strongly in the short term, before being impacted by price competition and a shift from user-paid retail subscriptions to new wholesale-enabled models. The ground-breaking study predicts that the wholesale market for broadband will evolve in three separate directions:
The incremental revenue opportunity for new “slice and dice” wholesale business models in mobile broadband alone is forecast to be $21bn worldwide by 2020. The report’s co-author and founder of Disruptive Analysis, Dean Bubley, said “Both fixed and mobile operators need to look beyond the traditional ‘end user subscription mindset’, and examine new and innovative wholesale opportunities. At the same time, they need to embrace radical evolution of their retail portfolios – for example, supporting prepaid fixed broadband, or offering innovative tiering and policy structures for mobile Internet access from smartphones and tablets. Whoever coined the term ‘dumb pipe’ has cost the industry billions in shareholder value through negative word-association; instead, “Happy Pipe” reflects optimism and some really interesting opportunities ”. According to Chris Barraclough, co-author of the report and Managing Director of Telco 2.0, “Telco 2.0 is not about throwing away existing operator business models, but about evolving them to generate additional value. In new Telco 2.0 style ‘two-sided’ business models, there are ‘upstream’ and ‘downstream’ customers – upstream customers are typically enterprises or merchants seeking to reach their markets – the so-called ‘downstream’ customers.” “As we show in this report, there are many creative ways that operators can add more value for existing downstream customers. However, it is also clear that those companies providing services over the Internet will increasingly seek to mash-up connectivity more tightly with their own offerings, for example by including connectivity as a part of their products. These new ‘upstream’ customers are alone forecast to generate over $90 billion in broadband revenues globally by 2020.” The report, “Mobile, Fixed and Wholesale Broadband Business Models: Best Practice Innovation, ‘Telco 2.0' Opportunities, Forecasts and Future Scenarios” is available to buy from Disruptive Analysis and Telco 2.0. Details are available at New Mobile, Fixed and Wholesale Broadband Business Models and www.telco2.net
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About Disruptive Analysis Disruptive Analysis is a technology-focused business advisory firm. Founded by experienced analyst Dean Bubley in 2002, it provides critical commentary, research support and consulting support to mobile, wireless and telecom operators, vendors, users, investors and intermediaries. It focuses on mobile broadband, devices, carrier business models, mobile applications and wireless policy & regulation. Disruptive Analysis' motto is "Don't Assume" and it actively looks for flaws in seemingly clear consensus. Sometimes these are negatives, such as over-optimistic expectations of new product uptake or a hidden limitation of an underlying technological enabler. In other cases, a new addressable opportunity can be spotted well ahead of the market. disruptivewireless.blogspot.com
About Telco 2.0 Telco 2.0™ is a collection of research, brainstorming and consulting services designed to catalyse change in the Telecoms-Media-Technology sector. The Initiative stimulates new ways of thinking about Business Models, Service Portfolios and Technical Architectures. Created by specialist analyst and consulting company, STL Partners, the Telco 2.0™ Initiative was launched in May 2006 and is supported by many of the world’s leading telecoms companies and their partners. Research: www.telco2research.com Senior Executive Brainstorming: http://www.telco2.net/event/ Strategy Consulting: http://www.stlpartners.com/consulting.php Blog: http://www.telco2.net/blog/
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