India’s telcos could take as much as 50 percent market share (installed base) in the video subscription business, equity analysts at HSBC Global Research estimate.
“This implies urban digital cable TV average revenue per user (ARPUs) may expand two to three times in the medium term,” HSBC argues.
Two points worth noting: it often is a safe assumption that attackers can grow revenue by taking market share from incumbents, when markets are well understood and incumbents have had little direct competition.
Also, the move into video content distribution moves Indian telcos back into one key
“application” area, as their voice app and messaging app businesses slow and decline.
x
x
We often forget that telcos once wished to sell an app--voice communications--and had to build networks to deliver that service. Likewise, broadcast TV and radio stations wanted to deliver TV and audio, and similarly built their own networks to do so. Cable TV providers did the same.
The main point is that revenue and business models are driven by apps customers want to use. As legacy app revenues recede, networks of all types must find new apps to generate new revenues to replace what they lose.
Such moves might be called “going up the stack” into the app space, and beyond the “internet access” or “application access” function. The moves might also accurately be termed a return to the historic revenue models: using networks to deliver applications and services customers want to buy.
That is why “diversification” moves beyond “traditional” telecom services are so important. While there is danger as entities move into new lines of business, there really is no alternative.
To prosper, maintain revenues and profit margins, network operators must discover or create new “apps” that create sustainable revenue models.
No comments:
Post a Comment