With the caveat that the causal link between customer satisfaction and supplier success is indirect, what would it take for any single supplier to massively distance itself from its competition? Across a range of applications, it seems there is room for disruptive gains.
If consumer satisfaction is directly and causally related to supplier revenue, then many of the most popular social media apps are in danger as great as many Internet service providers and video entertainment providers. Conversely, there seems clear room for a disruptive attack. Continue reading
Though antitrust and communications regulators worry about the level of competition in U.S. markets, in mobile communications or fixed communications segments, many practitioners and analysts might argue that competition is increasing in the U.S. market.
In the fixed segment, Google Fiber and other third party high speed access providers pose high levels of competition in a growing number of markets. Nor are AT&T and Verizon able to rest comfortably in their competition with cable companies, as evidence suggests both firms will continue to lose ground to cable providers unless both firms not only invest more heavily in fiber to home access, but activate those services for symmetrical gigabit speeds, as well. Continue reading
Build-versus-buy decisions are in flux in telecom service provider, enterprise and consumer markets. The general movement is in the direction of leasing rather than owning, buying rather than building. At the same time, in some product segments, such as mobile backhaul, the opposite trend also is happening. Where leased transport had been dominant, now mobile service providers are shifting to “dark fiber” approaches that resemble “owned” capacity. Continue reading
When big existing markets shrink, big new markets are required to replace those lost revenues. As recently speculated, average revenue per connection, which might represent $4 a month, could drop to $1 a month by 2020. Some quick math: there are 4.4 billion machines or devices now connected to each other or to servers. This will likely grow to 10.3 billion by 2018, a study sponsored by Vodafone predicts. At $48 a year, that implies potential revenue of about $211.2 billion of connection revenue. Let’s assume average ARPU for an M2M device of about $2 a month, or $24 annually, in 2018. That implies revenue of about $247.2 billion. That’s a market large enough to be very interesting for mobile service providers. Continue reading
Discontinuities — distinct or sharp breaks — in the telecom business are relatively rare. Most trends develop relatively slowly, even if the cumulative effect, over a decade or so, can be as significant as a change of 50 percent to 70 percent in revenue sources or products. The principle is that a series of smaller quantitative changes eventually accumulates in a significant qualitative change. Consider the matter of fixed network voice services in the U.S. market. Compared to 2000, U.S. incumbent telcos in 2013 served about 42 percent of accounts sold in 2000. In other words, over about a decade, U.S. fixed network telcos lost half of their voice lines. Continue reading