GSMA exec warns on missed operator opportunities

18 SEP 2017

LIVE FROM OPERATIONS TRANSFORMATION FORUM 2017, HONG KONG: Javier Albares, head of corporate strategy at industry association GSMA, identified the need for improved monetisation as a key driver of digital transformation, noting the gap between the value of telecoms companies and ecosystem players is growing.

“As an industry, we have not been able to solve this”, he said.

Albares noted that data traffic grew 60 per cent last year, but operators’ revenue increased 1 per cent, highlighting that they are failing to cash in on the trend. “There is a huge gap between the opportunities that we are creating as an industry, the services and the devices that run into our networks, and the revenues that we are capturing associated with those use cases,” he said.

Operators also continue to expend large sums in terms of capex and opex to match the growing demand for connectivity, but are now “reaching the limit of what can be achieved with the current revenue structure”.

While the GSMA executive noted that these are an “inside-out” view of the challenges facing operators, other factors are somewhat the opposite: an “outside in” view.

Comparing the market capitalisation of six companies, including Google and Facebook as well as Microsoft and Tencent, with telecom operators, Albares noted the numbers have diverged over the past three years to four years. “While the telecom industry is still growing and their market cap has grown maybe 3 per cent to 4 per cent” per year, ecosystem players enjoyed “around 30 per cent” increases each year over the same timeframe, he said.

“What are we doing that we are creating opportunities for all these people to really grow fantastically, while we are unable to capture a share of the value that we’re creating?” he mulled.

Albares paused to explain the telecoms industry’s finances remain in robust health. The examples he offered do not highlight problems today, but rather problems “related to expectations of the world that is going to come in the future,” he said.

Addressing such future challenges will require a shift in the mindset of the mobile industry, including greater consensus over the direction it is moving in, and fully leveraging opportunities for collaboration.

“If we want to continue being relevant, we are going to need to invest a lot more in customer knowledge. More than we have done in the past,” he said.

The industry must also use its collective strength to glean customer knowledge, Albares said, noting that it collectively represents 5 billion customers.

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