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AP telcos undergoing dramatic changes

By Jack Loo | Nov. 26, 2012
Providers are banking on digital media and content for long-term growth

Telco operators in the region can no longer depend on traditional services for long-term growth, according to IDC.

"The future telco in two to three years time should look dramatically different. It should be an entity where their traditional connectivity services should account for no more than 40 percent of their total revenue," said Adrian Dominic Ho, Principal Telecom, Mobility Lead, IDC Asia/Pacific.

While the opportunities for cloud and mobility continue to be major market transitions in the eICT industry, analysts at IDC say that telcos should turn their attention to digital media and content as collectively this industry will be worth over US$55 billion by 2016.

Ho noted that there had been a surge in acquisition activity in the last 12 months by telcos with many willing to pay premium prices for digital media and content intellectual properties.

"Content and digital media should be the ace of spades for many telcos and it will allow them to regain the customer intimacy that they have long lost with their clients," said Ho.

IDC had also published 10 predictions for the telecommunications industry that its analysts say represent major trends with either the most significant financial impact or long-term market impact across the Asia/Pacific region.

1) New frontiers

The region's frontier markets including Myanmar, Bangladesh, Cambodia and Sri Lanka, are unique by themselves and have come off difficult economic periods and now promise a sustained period of strong economic growth.

2) Tablets are business productivity tools

Video, business applications and social networking are widely used applications on tablets for various purposes including research, collaboration or to enable a mobile workforce. The launch of Windows 8 tablets is one factor; it has the potential to be the de facto enterprise tablet. In addition, the emergence of 7-inch tablets will spur demand in emerging markets.

3) Smartphone battle goes high end

In 2013, IDC is expecting a ramp up of these phones that are 4G or LTE enabled. The first high-end phone out of the gate is the Windows 8 phone which Microsoft/Nokia is banking on to make itself a competitor in the smartphone market again. Blackberry is expected to launch the much delayed BlackBerry 10 in the first quarter of 2013.

4) The digital content advantage

The last few years have seen telcos building up their digital content portfolio. This includes nurturing ISVs and developers to create application marketplace for both the consumer and enterprise market, acquiring content providers and investing heavily in new media. Some telcos have also gone on an acquisition spree with social platforms, online portals and cloud solution providers as their main acquisition targets.

5) Multi-channel is the only channel


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