Telecoms industry ‘to lose up to €260bn’ in the next 10 years

The telecoms industry is in a period of huge upheaval that will see $300bn (€260bn) of revenue wiped from traditional telecoms across the world in the coming decade.

Network operators will have to evolve into entertainment and enterprise IT businesses with a strong focus on creating and owning content to remain relevant, an industry event has heard.

BT Ireland head of insight, innovation and policy Cathal O’Toole told the Telecommunications Graduate Initiative industry forum that the proliferation of over-the-top services such as Whatsapp has eaten into telecoms’ revenue streams and forced them to rethink their business.

“€1bn has been wiped off the telecoms’ market in Ireland in the last seven years. Growth is going to come out of two areas. It’s going to come out of entertainment and enterprise IT.

“Looking globally from here to 2025, $300bn is going to come out of traditional telecoms over that 10-year period but if you look at those two businesses, TV and digital media is going to go up by $200bn and digital advertising by another $200bn.

"Enterprise IT is going up by $500m so that’s $900bn as a total, offsetting the $300bn [loss].

"That’s obviously a change, we’re not now selling minutes and connectivity we’re getting into something else,” Mr O’Toole said.

He pointed towards Virgin Media’s recent €80m acquisition of TV3 while Eir’s chief technology officer Helene Graham highlighted her firm’s takeover of Setanta Sports as part of its move towards becoming a “complete service provider”.

“Entertainment is very important and we certainly realised when we launched eFibre that if you don’t have the content it’s very hard to get customers,” Ms Graham said. 

Service innovation is no longer driven by companies like Eir, but by businesses “from outside the community of operators, vendors and academia” like Facebook, Netflix and Whatsapp who understand what the customer wants and can deliver quickly.

All those services, however, rely on operators’ networks which if they were to be shut down for just five minutes would see “the world collapse”, she said.


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