The ace of spades for telcos: Content and digital media

Telco transformation is only at best half complete across the Asia-Pacific region and the hardest hour lies ahead, says International Data Corporation (IDC).

Telcos have realized that they will be locked in an unrelenting death spiral if they fail to modernize and embrace adjacencies.

“It will be entirely self-defeating if telcos believed that their traditional services had the longevity of growth,” says Adrian Dominic Ho, Principal Telecom, Mobility Lead, IDC Asia/ Pacific.

“The future telco in two to three years time should look dramatically different. It should be an entity where their traditional connectivity services should account for no more than 40% of their total revenue.”

Telecom service providers in the region continue to be pressured by the overwhelming weight of unfettered competition and pricing pressures across almost all their traditional services. However the ongoing transformation has gathered pace and some telcos have begun to show some genuine nerve and bold audacity that has allowed them to embrace the wider opportunities in the eICT world.

The Asia-Pacific region is being shaped by rapid urbanization, fast paced demographic changes and accelerated expansion. All these factors are set to drive demand for a wide range of eICT services across the region. This include facilitating governments and healthcare authorities to modernize and automate to meet the demands of their constituents, MNCs who are aggressively competing and expanding in the region and the affluent Asian consumer who has an insatiable demand for content.

“What will define them is how they embrace the premises of future growth that lies squarely on the trinity of cloud, mobility and digital content.”

While the opportunities for cloud and mobility have been discussed at length and continue to be major market transitions in the eICT industry, it is the area of digital media and content that telcos should turn their attention to, as collectively this industry will be worth over US$55 billion by 2016.

This would include opportunities in: machine-to-machine; consumer and business applications; electronic and mobile commerce; mobile advertising; media content; eHealth and; social media platforms.

“Content and digital media should be the ace of spades for many telcos and it will allow them to regain the customer intimacy that they have long lost with their clients,” says Ho.

“There has been a surge in acquisition activity in the last 12 months by telcos with many willing to pay premium, underscoring the heightened expectations and realism of this.”

Telecommunications Predictions

Frontier markets will be the new battle frontier

According to IDC, there has been heightened interest in investing in frontier markets over the last few years for several reasons: faster economic growth, favorable demographics and better valuations which offers better returns.

The Asia-Pacific region is home to several promising frontier markets including Myanmar, Bangladesh, Cambodia and Sri Lanka. These countries are unique by themselves and have come off difficult economic periods and now promise a sustained period of strong economic growth.