Web 2.0 and VOIP threatens telcos. Fact.

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Most telecoms professionals are not confident that their industry is set up to cope with the threat from new internet and IP-based services.

According to research from STL, a telecoms analyst firm which surveyed over 550 people, over 75% now believe that telcos need to “dramatically alter their business models” if they are to prosper in the Web 2.0 world.

The suggestions from these worried executives include structurally separating the sector into different businesses – one focussing solely on the network, and the other on the retail and services business.

Simon Torrance, CEO of STL, commented: “The Telco industry has woken up to the threat posed by the internet and Web 2.0 business models. It now needs to address those issues.”

Other key findings from the survey include:

• 75% of respondents lack confidence in Telcos’ ability to create long-term sustainable growth in an IP-based world

• 68% felt Telcos have lost control of their core product – Voice and Messaging are no longer the exclusive domain of Operators
• 76% felt that the controlling culture of Operators (manifested in a “walled garden” approach to services) is no longer viable and that the openness found in the internet world is far more relevant
What can I say? It looks like they are smelling some strong coffee for a change.

However, the health-check on all this is that STL is clearly in the business of making telco executives more scared than they are already and selling them consultancy off the back of it. So bear that in mind.

For more on the findings see Telco 2.0TM – How can telcos make money in an IP-based world?

  • http://www.telecomlog.nl Martijn

    I agree and just wrote an article in the Dutch Telecom Magazine (may 2007) about it. It will be on http://www.telecomlog.nl somewhere next week, unfortunately only in Dutch.

  • http://www.flexta.co.uk Stephen Jones


    In the UK, Telcos are going through a programme of diversification; adding services (e.g. downloads, broadband, etc.) that compliment the core “voice” offering.


    Stephen Jones

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