As mobile operator margin becomes squeezed, it’s time for them to focus on offering shared data plans in order to survive the threat form Over The Top (OTT) VoIP and messaging services, says a new research from Juniper Research.
With mobile operator expenditures now in excess of $800 billion annually, several leading operators may face the possibility of costs exceeding revenues by the end of the decade without remedial action, says Juniper Research.
A combination of flatlining revenues allied to surging data traffic costs could ultimately threaten the viability of network operations, says the report titled, “Mobile Operator Business Models: Challenges, Opportunities & Strategies 2014-2019.”
On an average, mobile operator margins had fallen by an average of 6.4 percent over a three year period, with 5 of those surveyed experiencing decreasing margins in every year throughout the period.
Furthermore, a number of major operators now have single figure margins: with costs currently increasing at 1.5 percent-2 percent per annum, the situation is unsustainable in the longer term.
Without more widespread network optimization, the situation could become critical in a number of developing markets. With surging mobile Internet adoption in the Indian Subcontinent, regional operators could see data costs outstrip data revenues by $45 billion within 3 years unless networks are optimized, the research said.
However, leaders like Verizon and AT&T have bucked the trend in falling margins by introducing shared data plans, Juniper Research said. Verizon had seen wireless revenues increasing by more than 7 percent despite operating in a saturated market, while AT&T now had more than 14 million households on shared plans.
Dr Windsor Holden, author of the report, says, “Given the threat from OTT (Over The Top) VoIP and messaging services to core service revenue, the US emphasis on focusing the value on the data element is absolutely the right way to go. This is particularly true within an increasingly 4G environment.”
