Few retail service providers ever have preferred to operate as “wholesale only” suppliers, absent some compensating freedom to enter other businesses. Rochester Telephone was eager to trade its local access monopoly, becoming an open platform, in return for the right to enter the long distance business.
SingTel likewise has happy to open up its Singapore network, becoming a wholesale network, in exchange for the right to build new businesses overseas.
Telstra was persuaded to abandon its facilities-based fixed network strategy in exchange for the right to enter the mobile business in a bigger way.
In other cases, adopting a wholesale-only strategy might make sense for a newcomer trying to break into a highly-competitive segment of the industry, such as backbone or mobile networks.
This might also be an issue elsewhere where new contestants enter markets. “The boom years are either over or coming to an end very fast,” argue consultants at Deloitte, looking at options for incumbents in the European telecom business .
That is one of the choices Dish Network will face as it builds out its own 5G network, starting with narrowband Internet of Things (NB-IoT).
Given a choice, it is rational for service providers to choose retail strategies, as average revenue per account and profit margins can be much higher than for a wholesale-only approach. But sometimes markets are simply so saturated, and so mature, that some means of differentiation has to be found.
And that could lead Dish Network to contemplate a wholesale-mostly or wholesale-only business model.
No comments:
Post a Comment