Starhub, M1 and Singtel’s existing telecom business model approaches end of life
Drizzt:
For potential investors in Singapore’s telcos as well as investors already vested, the question they evaluate is which is better. I would rather post the question: will they survive to pay their existing 8%,6% and 4% dividends?
This manifesto from Telco 2.0 seeks to explain and address why the telecom business model is changing and it is up to you to decide how these Starhub, M1 and Singtel will be affected by a dying business model.
Executive Summary
Is bundling of voice, broadband data and media content enough to grow the telecoms industry? We think that a vital part of the business model is missing.
New value lies in addressing the friction that exists in everyday interactions between businesses and consumers, and governments and citizens. Typical examples include: authenticating users, market research, targeting promotions, distributing goods and content, collecting payments and providing customer care. These processes today are often slow, inefficient and ineffective. They waste money and affect customer satisfaction.
Telcos collectively have assets that can address this situation: real-time user data, secure distribution networks, sophisticated payment processing capabilities, trusted brands, a near universal subscriber base, as well as core voice and messaging products.
To realise a new business model opportunity these assets must be re-organised. A ‘two-sided’ telecoms market structure is required where telcos facilitate improved interactions and transactions between people and organisations. Telcos must continue to attract retail consumers and satisfy their needs. But, in addition, they should extend the capabilities of their traditional consumer products to explicitly support enterprise business processes.
To do so they will need to create open and standardised platforms that third party organisations can plug their enterprise IT and communications systems into – just as they plug into the telephone and Internet networks today.
We estimate this total opportunity could be worth $350bn of new revenue to telcos in 10 years’ time, equivalent to c.15% of total telecoms revenues at that time. The value to the wider digital economy – industry and consumers – will be many times bigger.
(Please see: Future Broadband Business Models “Beyond bundling: winning the new $250Bn delivery game” and The 2-Sided Telecoms Market Opportunity “Sizing the new $125Bn platform services opportunity”)
[Read the full manifesto here >>]
Related posts:
- Identifying the Business Model of your Dividend Income Stock
- The erosion of telecom margins: Will mobile operators like Singtel, M1 and Starhub lose to Google and Apple?
- A peak into the future of telecom profitability 2012-Singtel, Starhub and M1
- Find the Dividend Cash King among telecom
- Long Term Market Analysis: ARPU expected to fall and voice calls to be free likely for M1, Starhub and Singtel
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[...] I wrote in the past about the fundamentals of investing in Singapore Telecoms and what is the future are in store (Singtel,M1 and Starhub analysis here). I also wrote about the coming changes in the industry, how it is going to be bad for developed market telcos (article here). [...]