Today, May 17th marks the World Telecommunication and Information Society Day created to help raise awareness of the possibilities that the use of the Internet and other information and communication technologies can bring to societies and economies, as well as of ways to bridge the digital divide. (Source ITU).
Ari Lopes, Principal Analyst, Latin America from OVUM was invited to discuss what telecoms operators need to do to adapt in the new competitive landscape.
Check out full interview:
What is the biggest challenge facing telecom operators in Latin America? Ari: In the past couple of years Latin America faced two challenges: macroeconomic problems in many countries led to currency devaluation and impacted GDP growth, which, in turn, also impacted the telecoms sector. The second problem has been challenging the sector for years, declining revenues in traditional telecoms services, like voice, have not been fully offset by the growth of new digital services, the industry is still articulating a new strategy to sustain growth in the long term.
Competition, Big Data, 5G, IoT and Infrastructure Investment, are telecom operators prepare for that? Ari: Some of them are some others are not. Many telecoms operators in Latin America don’t invest enough in R&D, they rely on their vendors to get in touch with new technologies and new business, that means they haven’t built an internal mindset that can support them in designing their strategy in any of these topics. The main issue with 5G, for instance, is not the technology itself, although there are big challenges there, but is more about which business cases are relevant for the operator, which verticals they should invest, and, in many telcos, they still haven’t started this discussion.
Where do you see opportunities for growth in 2018/2019? Ari: Internet of Things is a hot topic, Ovum expects new LPWA networks to be deployed within this timeframe (LTE-M and NB-IoT), that will allow some operators to explore new verticals. B2B is also an important area, specially offering digital services like digital security, cloud services for SMBs and large corporations. There will be strong demand for connectivity, both mobile and fixed, we expect that FTTx will keep growing by double digit rates, even though its customer base will remain well below that of DSL and cable. Finally, there will be an increase in LTE-A networks and this will enable faster mobile broadband services.
Do you not think operators have missed out, given the dominance of OTT companies? Ari: I don’t think so, first of all, connectivity remains a solid revenue generator for telcos, also, they are learning to cooperate with OTTs. Overall, Latin American telcos have not been successful when competing with OTT companies, but they have been adapting their strategy, and, for some services, they have decided to partner with OTTs, bundling the most popular OTTs in their plans, for other services, like video, some launched their own OTTs.
Technology and Telecommunications will keep transforming our society so we wish all the best for all employees of the ICT sector.
Ari is a principal analyst for Latin America at Ovum. His main research topics include the development of the broadband market in Latin America and the design of pricing strategies for mobile and fixed broadband.