A study released by JAJAH claims to have identified that the biggest
concern for global telecoms executives is the loss of landline
connections and the continuing rise of IP-based services.
JAJAHs Q2 Telecommunications Industry Issues Index focuses on
carrier reaction to the ongoing shift in the global telecommunications
industry. According to JAJAH, it reveals a global industry united in
its lack of certainty around how to confront the IP-fuelled revolution,
but united in its belief that IP-based services will be the source of
future revenue growth.
The research was conducted at CTIA in San Francisco in March 2008 with
300 delegates from the telco industry, and via one-to-one interviews
conducted with C-level executives from 15 Global mobile and fixed line
carriers from the UK, the US, Italy and Belgium, carried out in in
April and May.
The primary fear amongst carriers, says JAJAH, is the growing churn of
landline connections, with IP-based Value Added Services (VAS) and new
pricing strategies seen as having the best potential to replace lost
revenue, even though many companies have yet to define their IP
strategy.
JAJAH says that the findings are supported by a recent survey showing
that the number of landlines in the UK fell by 5% to 34 million homes
last year. The number of mobile-only households has also risen, with
13% of UK homes not having a landline. According to Ofcoms 2007
International Communications Market report, at the end of 2006 there
were, for the first time in the UK, more households with a mobile
connection than a landline.
According to the JAJAH study, new networks, competitors and connectable
devices are placing an unprecedented burden on global carriers as they
come to terms a new type of competition, coming from beyond their
traditional competitor base. This competition is posing an increasing
challenge to carriers to remain central to their customers connected
life with the demand for any time, anywhere, interconnected voice and
data services placing significant strain on networks and product
innovation.
The carriers are experiencing a significant innovation lag compared to
developers of IPbased services, says JAJAH, and remain unsure how to
deal with the new breed of competition, best illustrated by the
integration of voice into Instant Messenger services, which have
attracted more than 300 million users worldwide. With domestic markets
heavily penetrated, it is accepted that international markets will play
a bigger role in future revenues and market growth. While IP-based
operators can enter markets with little or no infrastructure, says
JAJAH, its research shows that many carriers remain without a
go-to-new-market strategy.

Key findings from the research include:

Landline churn
The biggest fear amongst fixed line telecommunications companies is the loss of landline connections, with four out of five companies saying landline replacement revenue is at the top of their agenda.

Value Added Services the saviour?
The majority of carriers rank the addition of Value Added Services to their portfolio as a higher priority than their network. Two-thirds of C-level executives state that Value Added Services are the single most important factor for increasing customer loyalty and revenue.

Talkifying the web
It is unclear how to deal with the perceived threat from new-style competitors, with two-thirds more concerned about IP-based competitors than new triple-play competitors.

IP telephony strategy gap
Many companies questioned identify significant room for advancement in IP telephony strategy. Two-thirds felt IP telephony represented the future of telecommunications and are looking to carrier-friendly companies like JAJAH to partner with to quickly advance their IP offering and VoIP backbone.

The future is international
International markets hold an enormous potential with 90% of telecom companies expecting significantly more revenue growth from overseas, rather than home markets in the next five years.

Infrastructure investment black hole
With a lack of funding for infrastructure investment, more than 60% of the executives questioned believe they will outsource a greater proportion of infrastructure development by 2009.

Triple-play boom
Service expansion by telcos will lead to an increase in triple play offerings in the US and Europe in the next 12 months. More than one-third of single- and dual-play companies plan to launch a triple-play offering within the next 24 months. Of those companies looking to expand into IPTV, more than half will do so via acquisition.

JAJAH says its report puts the spotlight on an industry unsure of its next steps, but with tough decisions to make quickly. Where once it was a race to lay pipes, the company says, the new battlefield is Value Added Services, and preservation of customer base and growth of revenue are the goals.
Convergence has been the key word for the past decade, but now IP platforms are coming to maturity and many traditional organizations have yet to define their go to market strategy, says Phil Kendall, Director of Global Wireless Division at analyst Strategy Analytics. As consumers crave new forms of communication and voice bundled services, its not surprising to hear many CEOs are putting these issues front and centre. JAJAHs findings are a dramatic example of how under-prepared many companies are to deal with the industry shift.”