Telcos’ Revenues Could Shrink by $172 Billion in Five Years

According to a research report published by Telco 2.0, telecom companies across the globe could lose up to $172 Billion in revenues from voice and messaging services. The report “The Future Value of Voice and Messaging” presents forecast for 9 markets including the United States, Canada, France, Germany, Spain, UK, Italy, Singapore, and Taiwan. The total decline is forecast between $92 Billion (-25%) and $172 Billion (-46%) on a $375 billion base over the next five years.

Earlier, credit rating agency Moody’s had maintained a negative outlook for the telecom sector in Europe. These predictions are a stark reminder of the issues that telcos continue to face, such as the weak macroeconomic environment, intense competition that has forced profit margins down, and one of the biggest threats – OTT service providers – increasingly taking away a large chunk of the voice & messaging revenues.

How operators can fight against the declining ARPU

However, not all is lost as there are opportunities for operators to enhance the average revenue per user. With high speed 4G LTE services being rolled out, operators are all set to pursue new revenue opportunities by way of premium pricing, shared data plans, and moving away from unlimited data subscriptions to tiered pricing. The much-feared OTT (over-the-top) threat can be tackled through value-added services and bundled offers to mitigate the impact of messaging apps such as WhatsApp.