The global economic downturn could push nations towards investing in a single, open next-generation broadband network, rather than continuing the current strategy of multiple networks delivering competing digital services.
The Technology, Media and Telecommunications (TMT) practice at management consultancy Deloitte has issued a series of predictions for 2009 — looking at how technologies and trends including mobile broadband, smartphones and fibre broadband investment could be affected by the downturn.
According to the report, the high costs of deploying fibre could make regulators reassess the multiple-network approach to competition — and instead look at single fibre-network deployment that is shared by multiple operators.
"2009 may see a fundamental change of ideology, perhaps similar to the shift in opinion on national ownership of parts of the financial sector," the report says. "Regulators may determine that the fibre connectivity market is not sovereign, and that the case for a single network, with shared ownership and open access, might be the best way forward."
"Telecommunications operators should be aware of the challenges, as well as the opportunities, that this [moving away from infrastructure-based competition] could imply. Shared ownership may reduce fibre's cost and risk, but may also require a new, unfamiliar approach to competition. Companies should determine which skills they may need to hire to be able to compete on the basis of services, or service levels, alone," it adds.
Meanwhile, the report also predicts the year ahead holds plenty of fresh challenges for mobile operators, with growth in smartphone shipments likely to slow.
According to the report, smartphone market share may increase by no more than two percentage points in 2009 — small beer compared to previous years' growth in high-end handsets. But Deloitte says operators should tread with care if they are considering reducing handset subsidies to improve margins as they risk undermining the data revenues that smartphones bring.
"[Operators] should bear in mind that smartphones generate over 25 percent of mobile data traffic," the report states. "Operators need data traffic growth to offset declining margins for voice and SMS services. They should work with handset makers to ensure that feature phones do not compromise data usage."
On the mobile broadband issue, Deloitte says operators should examine their business models carefully. "Given that network capital and operating expenditures are likely to have to rise, retail offerings based on subsidised PCs and all-you-can-eat tariffs may not be sustainable in the longer term," it states. "Evidence from the voice market suggests that consumers are reasonably happy to pay a premium in return for the convenience of mobility."
Operators will also have to consider how to approach the rising tide of third party mobile apps — which are not likely to generate any direct download revenue for them but could provide opportunities to create new revenue streams — offering payment processing services or location awareness, for example. They may also want to assess whether they should be opening their own app stores, however the report warns: "It may be more profitable to leave third parties to shoulder the costs."