2015 will be a year that brings various evolutions to developing and emerging markets.
Operators and service providers will face a challenging market characterised by a strong competition, a changing demand and a varying revenue mix. The shift from fixed-line to mobile communication and from voice to data traffic is accelerating. A decline in revenues from fixed telephony, mobile voice and text messaging services will be noticed, and telecom revenue growth will be mainly data-driven.
In emerging markets, mobile data will be the largest source of revenue, driven by smartphone adoption and LTE deployment. There has been a tremendous increase in video traffic for both fixed-line and mobile users. Also considering its growing popularity, it is predicted that the demand for video traffic will continue to increase even more in the future. With the widespread use of smartphones, the emergence of tablets and the continued use of laptops, there is a sudden increase in the availability of mobile devices that are capable of displaying high-quality video content. This in turn will lead to more usage of mobile data, which will increase the demand for broadband technologies. Consequently, operators will be motivated to invest in LTE technology. It is expected that LTE rollout will continue to grow rapidly especially in Asia Pacific.
The use of Over The Top (OTT) voice and texting services such as Skype, WhatsApp and Viber will continue to expand rapidly across emerging markets. This will consequently lead to a decrease in revenues to mobile companies. To increase revenues and minimise losses, service providers will consider partnerships and alliances with OTT firms.
On the other hand, short-term growth in fixed-line revenues may be observed in developing markets as more mobile networks get adopted. Rollout and expansion of 2G and 3G networks will continue to increase. Across the majority of areas, mobile usage remains voice-centric while, data usage is limited to large cities with high-speed mobile networks. The popularity of social networking in developing countries has increased the demand for mobile access. Despite the high demand, mobile penetration is still relatively low across some regions in developing markets, particularly in some African markets. This is due to the lack of a reliable infrastructure especially in remote rural areas.
Service providers will invest in new services and lines of business to increase revenues. For a competitive advantage, operators need to gain insights into market demands by investing in data analytics. By leveraging big data analytics technologies and through access to customer data, telecom companies can understand customer behavioural patterns and act accordingly.
Noha Sadek is a consultant and project manager at IBM. All views expressed in this piece are those of the author, and do not necessarily represent the views of IBM.