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Mobile broadband growing by 19 per cent annually

Jan 4, 2013

Research firm Ovum suggests today that mobile broadband presents the largest opportunity for operator revenue growth until 2016. Its latest report, “New Revenue Opportunities in Telecoms: 2013–16”, finds that global telecom operator revenues exceeded $2 trillion in 2012, with 60 percent going to mobile operators.

John Lively, chief forecaster at Ovum, says that overall revenue growth is expected to be minimal over the period, although some segments will still experience above-average growth:

“The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry. Over the next 3 to 4 years, both fixed and mobile operators will face the same fundamental challenge: to increase new sources of revenue fast enough to offset the decline in mature services.”

He says that mobile broadband presents the single largest opportunity for telcos to claw back revenue, as the firm’s forecasts show the sector growing 19.2 per cent annually and generating $122.9bn in incremental revenue between 2013 and 2016. Other segments identified by Ovum as experiencing double-digit revenue growth over the next five years include public cloud, enterprise Ethernet, IPTV, and managed/hosted IP voice.

For infrastructure vendors, Ovum says increases in overall capital expenditures will be limited by low single-digit gains in service provider revenues. To grow revenues faster than the industry average, Ovum recommends that vendors position themselves in one or more high-potential product segments – such as converged packet optical, ROADMs, 40G/100G networking gear, carrier Wi-Fi, and network-related services. Component makers are warned by Lively to expect continued high volatility in market demand – higher highs and lower lows than their customers or end customers are experiencing:

“This can be mitigated to some degree by forming close relationships with infrastructure vendors and jointly understanding the end customers' needs and plans. Plus, winning a share of 40G and 100G business will be essential to avoid being left behind by competitors.”

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