Telcos are becoming more like dynamic entrepreneurs than utility providers, according to International Data Corporation (IDC).
A new IDC report finds that revenues that Central and Eastern European (CEE) telecommunications services operators generate from non-core-business revenues will continue to grow throughout the 2016–2020 forecast period.
The analysis shows that the combined revenues from all non-telecommunications services (including equipment sales) constituted 14.6 percent of the total revenues reported by the 11 observed CEE incumbent operators in 2015.
ICT services and the distribution of gas and electricity remain the most important areas of interest for telecom operators outside their core industry, but CEE operators also continue to search for new revenue streams.
From utility to entrepreneur
“It is not news that telecommunications operators sell financial services, energy, electronic appliances, and even household maintenance services,” says Kresimir Alic, Senior Program Manager at IDC. “The news is that these companies have started to change from passive providers of utility-like services to dynamic entrepreneurs able to quickly seize an opportunity on any market.”
He adds, “However, we expect somewhat slower growth of the incumbents’ non-telco revenues. This will mostly be a consequence of a decline expected in the energy services segment, following Magyar Telekom’s exit from the residential gas business and the transfer of the B2B energy business to a separate joint-venture company. Nevertheless, IDC is convinced that the growth rates will recover quickly, driven by increasing demand for terminal equipment (smartphones), and a growing number of business endeavors by telecom operators in various non-telco industries.”
The 2020 CSP
Against a backdrop of revenue pressures, new data demand and soaring competition, TM Forum’s Deputy CEO, Nik Willetts, has discussed the urgent need for operators to transform to become 2020 communications service providers (CSPs), which he defines as “a company that can provide the underlying infrastructure and a rich set of capabilities that meet customers’ expectations and power many of the ecosystems we are looking at today, [such as smart city, smart health etc.]”
See more about Nik’s vision for the 2020 CSP and how TM Forum supports operators in their transformation here and in the video below.