B2B apps key to telco revenue
The past month, as Malaysia and the world over, doubled down and restricted movements of populations, there have been many news reports about the boom in online services and how important the underlying Internet pipe is.
But how is this story panning out for the telco industry, a majority of whom built and own the Internet infrastructure that made these services possible?
According to Reuters, “In Asia, Africa, Europe and the Americas, a combination of high fixed costs, debt and market disruption has left telcos’ stocks, significantly underperforming the data-hungry businesses their networks carry.”
It goes on to say, “Globally, a 13-percent drop in the MSCI world telecommunications services index pales in comparison to healthcare, down 6-percent, technology, down 8percent, or consumer staples, down 10-percent.”
The poor showing illustrates the difficult dynamics facing carriers, even when their services are more essential than ever.”
For example, Vodafone, the world’s second biggest mobile operator, reported data traffic uptick of 50-percent. But its stock is down 23-percent.
So, it’s ironic that the stocks of companies’ that their infrastructure carries, for example Netflix streaming media and Amazon, have outperformed network operators.
Hard to monetise
A fixed pricing structure for users, but increased spending by telcos to serve surging demand, is exacerbated by much less revenue from roaming services due to much reduced travel. Juniper Research estimated this lost revenue to be worth some USD25 billion.
On top of that, some telco professionals for example the CEO of a German telco, anticipates that the wave of unemployment following businesses’ shutting down, would see companies and individuals putting off renewing their contract, or not being able to pay their bills.
Other telcos like Verizon however, are betting on business’s demand uptick for video conferencing services.
Verizon said it has entered into a definitive agreement to acquire Blue Jeans, an enterprise-grade videoconferencing and event platform in order to expand its “immersive unified communications portfolio”.
The deal expected to close by June, 2020 is estimated to be worth less than USD500 million. No exact figure is forthcoming, yet, but adding on B2B solutions, especially one so integral moving forward, to how individuals and businesses communicate, appears to be one strategy to grow network revenues, and perhaps even finally, fully optimise telco infrastructure.