Summits Yellow

Charge for Data or Raise Prices, Ovum tells Operators

Kirsty Styles

Although mobile operator revenue was $1.2tn in 2012, making up 60 per cent of total global telco revenues, Ovum believes that poor economic conditions and competition from OTT services will force these companies to seek out new sources of cash.

Its report, New Revenue Opportunities in Telecoms: 2013–16, found that data, which has been a largely peripheral source of income, presents the largest opportunity to claw back revenue. The analyst company forecasts that mobile broadband will grow 19.2 per cent per year over this time and generate $122.9bn in incremental revenue.

Emeka Obiodu, principal analyst, warned that the fundamentals of the mobile operator business have changed – in the age of Skype and Whatsapp, revenue for voice and SMS has been eroded and there are no longer enough heavy voice users to subsidise those who use less.

Referring to Ofcom’s investigation into the question of people terminating contracts if the price is raised by networks, he said operators will have to find ways of tilting price structures in recognition of people using data rather than voice. “As the cost of running networks and buying the spectrum isn’t disappearing, there needs to be a greater push by operators to find other ways to monetise. Either charge for connection or raise prices.”