Global telecoms revenue decline set to stabilise but where’s the growth?
Declining revenues seem set to stabilise and even show growth over the next few years, says recent research, but the forecast growth is modest and likely to be vulnerable to any unexpected market shocks. There are segments that have consistently delivered much higher growth and yet offer significant further potential. Isn’t it time to pay attention to the hosted UC opportunity for B2B customers?
According to Pyramid Research, after years of continuing decline, telecoms service revenues may begin to stabilise in 2016 and even enjoy modest growth in 2017 and beyond. Such growth is welcome but the predicted CAGR of 2% between 2016 and 2020 is suggestive of only modest improvement. It would not excite someone familiar with the stellar growth of the Internet industry.
In this context, it’s essential not to be lulled into a sense of complacency. Telecoms operators simply have to strive to do better – such modest aspirations will hardly help attract investors to the area or even appease existing shareholders. This means taking a long hard look at areas that can yield higher growth and taking positive action to achieve it.
If growth is likely to be modest from the provision of existing services, then alternatives are required. That’s why B2B services are capturing an increasing level of attention. For example, the number of hosted UC seats (lend-user licenses, in our terms) is set to nearly double by 2019, according to Infonetics, from somewhere around 30 million in 2014 to approximately 70 million in 2019.
That’s impressive growth. It demonstrates that there are areas in which service providers can invest that will secure double digit returns – investment yields that will likely be far more exciting to investors than the meagre 2% forecast from their core businesses.
Telecoms service providers face continuing uncertainty in their markets. Indeed, the 2% forecast growth seems a little precarious: is it vulnerable to unexpected market shock? Of course it is. What would it take to knock things of course? Not much, is the realistic and honest answer.
In this world of uncertainty, service providers need to do more. They must find avenues for growth that offer better returns than what effectively amounts to business as usual. That’s why B2B customers represent a huge untapped opportunity. This growth potential has been evident for years and the spread of hosted UC services has provided evidence that it can be captured. There is still significant growth potential and a huge opportunity to increase penetration and adoption of such services.
If you are looking for growth opportunities that offer genuine potential to deliver new revenue streams and profit, then paying attention to B2B markets is essential. Talk to Gintel to find out how to successfully target B2B customers and how you can target more exciting growth opportunities.