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Telecom Industry Fears Threat From Web 2.0

New research findings from STL, a leading analyst firm specialising in the Telecoms industry, has found that the vast majority of telecoms industry professionals lack confidence that Telcos are set up to cope with the threat from new internet and IP-based services. Over 550 telecoms industry insiders expressed their concerns in the survey, part of a new market study 'Telco 2.0TM - How can telcos make money in an IP-based world?'

The survey shows that the majority of telecoms industry insiders now believe that telcos need to dramatically alter their business models if they are to prosper in the Web 2.0 world. In particular, most industry professionals believe that Telcos need to be structurally separated into different businesses - one focussing solely on the network, and the other on the retail and services business - with fresh blood brought into manage these businesses.

Simon Torrance, CEO of STL, commented: "The Telco industry has woken up to the threat posed by the internet and Web 2.0 business models. It now needs to address those issues."

STL surveyed over 550 industry insiders from Operators, IT vendors, analysts and 'disruptors' in Western Europe, North America and APAC. Key findings from the survey include:

75% of respondents lack confidence in Telcos' ability to create long-term sustainable growth in an IP-based world

68% felt Telcos have lost control of their core product - Voice and Messaging are no longer the exclusive domain of Operators

76% felt that the controlling culture of Operators (manifested in a "walled garden" approach to services) is no longer viable and that the openness found in the internet world is far more relevant

The survey also finds that the Telco industry needs to change its thinking, moving away from focussing on the technology to being more aware of end-users' needs. Those surveyed felt that only by bringing in senior management who are experienced in running profitable, customer-facing internet & IT businesses to manage their retail service businesses will Telcos be able to compete for customers more effectively.

"In Western Europe in particular, BT is held up as the clear leader. Having been forced to separate its businesses by the regulator, it has been bringing in new blood from outside the industry, and is doing relatively well as a result," Torrance continued. "The big challenge for all telcos - fixed, mobile, BT included - is in making money from retail services. Skills in creating attractive new services are severely lacking and this is where a radical change in thinking and organisational structure is needed."

Of the over 550 professionals surveyed the breakdown includes: 30% operators and service providers, 35% Network Equipment Providers and IT vendors, 11% Telco 'industry disrupters/start-ups' and 25% Consultants, Analysts & Academics.

Building on this survey, the updated Telco 2.0TM Market Study provides a comprehensive roadmap for telcos to make the changes required to remain competitive. The full survey results can be found in the study at www.telco2.net/marketstudy.

STL will be discussing the issues raised in the Telco 2.0TM survey at their next Industry Brainstorm on 27-29 March 2007. For further information on STL and the Telco 2.0TM initiative, please visit: www.telco2.net.

Tags: VOIP, Phones and Telecommunications, NewsBlaze Wire

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Telecom Industry Fears Threat From Web 2.0