For many years we have been saying that voice – the good old fashioned ‘phone a friend’ kind – is dead. And for almost exactly the same number of years we have been saying that operators need to find new ways to replace this lost revenue.
It turns out, according to a new piece of work by Juniper Research, that operators will lose $157 billion from voice in the next five years.
According to Juniper, operators are looking for new revenues from 5G and AI. This is surprising as the industry has very little (and certainly no concrete) idea of where the money will come from in 5G or AI.
5G business models are still very much on the drawing board. Some ideas are centered around the enterprise, others cite VR and AR applications as providing the demand and the revenue. Others still say that 5G business models will come from – and be driven by – other industries.
The last seems the most sensible. As almost every industry on earth goes digital, that industry will develop based on what the latest technology can bring to the party. But that is hardly worthy of even the most basic planning spreadsheet.
AI is touted as a money saver rather than a money spinner. It will bring great efficiencies to many areas of operations – from customer care to banking, logistics to manufacturing. Whether it will actually produce revenue remains very much to be seen.
Juniper thinks that operators should also look at a CPaaS (communications platform as a service) model – which sounds good, and seems like the direction of travel. But, according to the press release that announced the research, “Juniper advises that operators must adopt new ecosystems of converged technologies, including voice, messaging and digital assistants such as Alexa.” The company believes that operators can provide a joined up set of applications because “the OTT market is fragmented”.
We would add: “… and also very clever and unencumbered by legacy, politics and processes”.
The research suggests that 5G will bring operator billed revenues of $88 billion in the same time span as the industry is losing that $157 billion, and while this might be encouraging, it does beg some questions.
How do operators make up the other $69 billion?
And are we simply stepping into the unknown?
A final question might be: are we actually at the point of realizing that the best thing operators can do is save that $69 billion by sticking to what they do best – being a provider of the best possible (wholesale) connectivity they can be?
We should look at our calendars and find a time and place to discuss this.
I guess some of that shortfall will be made up from reducing/ streamlining/ automating retail operations. Isn’t that what ‘digital transformation’ is all about? Closing down physical stores that seem to be neither use nor ornament to most high streets. Considerably simplifying tariffs and other elements of the business model. More consolidation.
Whether 5G is a success or not (in terms of telco revenues), the primary future customer relationship seems most likely to be wholesale (even consumers are much more interested in a ‘cash and carry’ deal for bulk data than differentiated services, I’d suggest). The key requirement for many telcos may be to plot a smooth and minimally disruptive flight path to that future reality…