Why Business As Usual Will Kill The Wireless Industry

May 8, 2012 - Openet

Guest post written by Niall Norton. Niall Norton is CEO of Openet, a provider of policy management software.

Telcos have always held incredible influence on other industries and have set the agenda as innovators. Outside of keeping the network infrastructure up and running, operator innovation was comprised largely of two goals: neutralizing competitors and maximizing profits.

With telecom operators generating most of their revenue from voice, text and data, the need to differentiate service was of minimal concern. As long as this profit came in and they had the largest customer base, this model “worked” and was rewarded by the market.

Unfortunately for the telcos, this business model has been outdated by two developments : the rise of really terrific devices and the ubiquity of the Internet enabled by high speed data networks. This in turn has exposed the traditional model to be too one-dimensional. The old model no longer pays off – as voice and text pricing continues to fall, growth for operators is only happening in new innovative data services. Recent reports from Juniper Research and Ovum paint a dire picture, with telcos hemorrhaging profits. Higher costs for consumers’ data use have been installed to supplant declining voice and messaging losses.

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