Future Business Opportunities and Challenges

Future Business Opportunities
and Challenges
Emmanue Onuzurike
1
INTRODUCTION TO CHALLENGES IN
TELECOMMUNICATION SECTOR
• Nowadays due to a fluidly changing technology landscape and varied

demographic
• reasons, telecom operators have discovered multiple challenges in
the telecommunications
• sector, which must be successfully overcome for a better outlook in
the industry. These
• challenges can be mainly classified as follows:
• 1. Competition from over the top (OTT) messaging platforms
• 2. Decrease in voice revenue
• 3. Costs of faster upgrade cycles to new technology
• 4. Development of 5G and Internet of Things (IoT) capabilities
• 5. Financial costs of increasingly complex services
Competition from OTT messaging platforms
• The widespread adoption of the Internet has offered a much cheaper way
to
• communicate than on traditional telecom networks. The OTT messaging
services such as
• WhatsApp, Messenger, Twitter and WeChat etc communicating over the
• Internet have been strong alternatives for the traditional short messaging
services (SMS).
• Approximately 2.5 billion people worldwide now use at least one
messaging app,
• which is steering valuable traffic away from telecom network text services.
There is an
• obvious decline in the number of SMS messages and the associated
Average Revenue Per user
• If this trend continues, text messaging is likely
to be severely limited
• completely and OTT service providers will
continue to steal valuable revenue from
telecoms.
Decrease in voice revenue
• The way people communicate is changing: where voice used to
dominate the communications industry, now Voice over IP (VoIP) is
gaining traction. Smartphone traffic is moving to Wi-Fi, and as a
consequence, voice traffic has decreased from 50% in 2009 to 41% in
2014, leading to a decrease in voice revenue of 2.7% by 2014. This is
also the main reason for the reduction of landline subscriptions 3
• Previously voice revenue was the largest source of income for
telephone company,
• and so the decrease in voice revenue has led to an overall decline in
Average Revenue Per
• User (ARPU). Telecom companies now have to finds additional sources
of revenue to
• replace dwindling voice and text revenues.
OVERCOMING OF CHALLENGES
In our current technical context, telecommunication providers are categorically
unable to survive being only connectivity providers. This is due to the reducing income
generated by messaging and voice services mention in the previous section, coupled
with the rising operator-borne costs of new 5G and IoT research, technology
upgrades and
operational overhead of increasingly complex services. The following subsections aito
describe the strategic transformations of the telecom service providers necessary to
overcome the previously mentioned challenges, and can be listed as follows:
• 1. Retaining a large customer base

• 2. Increasing existing and growing new revenue streams from 5G
• 3. Consolidations and partnerships with other tech companies
• 4. Mobile payments, mobile health and other applications
• 5. Optimizing Hardware Cost for Future Proofing
Retaining a large customer basis
• In today’s world, telecommunication companies are suffering from a
tangible issue
• to retain customers. However, in the current changing telecommunication
landscape, a large
• and loyal customer base is the key to earning a high, sustained revenue
from new and old
• revenue streams. Therefore, telecom companies are doing everything that
they can to retain
• customers, while in developed countries, smartphone companies are
racing to become
• broadband providers. Cell phones have become much more than just
phones, and data is
• rapidly overtaking voice as the dominant source of revenue in the industry
Business opportunities
• Telecom services providers could also foray
into the fields of digital commerce and
• digital advertising with collaboration with 3rd
parties who seek access to reach the millions
• of subscribers of the telecom provider. MTN
THRYVE is one such endeavour, spearheaded
by mtn, which exceeded the unique user base
of 1.6 million in December 2020
• Another promising area for telecom service
providers is the training and education of
• employees and interns in the telecommunication
sector. It can be taken a step further by the
• establishment of degree-awarding establishments
such as mtn foundation award scholarship that
awarded full scholarship to over 370 students in
some Nigerian tertiary institution.
conclusion
• Telecom operators are facing increasing
challenges in the digital era. Communication
tools based on the Internet, such as
Whatsapp, Instagram,Tik-Tok and Twitter, have
dramatically reduced the traditional profits of
telecom operators for SMS and voice calls, and
they are trying hard to avoid becoming just
simple data channels in the digital era.
• From the past experiences of some off the world's
well-known telecom operators, the best strategy,
they say, is to build up an open platform that can
attract participation from hardware providers, end
device suppliers, content developers and end
users. Telecom operators should also lead the
healthy development of this ecosystem, and the
gene combination of Internet and telecom
companies will become the core competitiveness.
• For the four telecoms operators in Nigeria, the
upcoming 5G battle is crucial. Standard
choosing and the timing of market entry are
key strategies. Obviously, MTN has taken the
first move advantage of 5G, Etisalat,Airtel and
Glo could also consider giving up their 3/4G
sunk costs by entering into the 5G realm to
seize the future market.
• Mobile Internet and big data will create
tremendous opportunities for telecom
operators. Mobile internet is expected to be
booming in the following three years.
Telecom operators control the last mile for all
mobile devices to access the Internet, and
therefore will share the future profit from the
mobile internet
• market. Currently, telecom operators are
advised to enhance customer loyalty and
increase the migration cost for changing the
mobile numbers and switching service
providers. A large user base is the key to
winning market share in the mobile internet
arena, and telecom operators are able to secure
a huge number of low-end users through
subsidizing low-cost Android-based devices.
THANK YOU

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Future Business Opportunities

• Nowadays due to a fluidly changing technology landscape and varied

• 1. Retaining a large customer base

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