The future of telcos is full of uncertainties. OTT-s are the new, cooler (and cheaper!) kids on the block who have rapidly taken over many basic communication services. Telcos are facing a significant decrease in their basic communication service revenues. There is a drop as much as 30 percent in SMS messaging, 20 percent in international voice, and 15 percent in roaming. Over the next decade, the spending on traditional communication services will likely drop by 36 percent. The shift also impacts other telco services. For example, broadband TV is losing revenue to streaming services like Netflix.
Repositioning the business model
For telcos, this creates an opportunity to reposition and rethink their entire role in communication systems. Telcos are not so much communication service providers any more, rather they operate as the main infrastructure that allows many companies to deliver content to subscribers for communication. At the same time smartphones and affordable mobile data plans are driving the growth in digital services. Mobiles already account for more than 70% of digital media time. This opens up a variety of monetization options, but it also requires experimental or even radical approaches.
One way is for telcos to transform themselves into connectivity, lifestyle and entertainment hubs for their subscribers, harnessing their wealth of data about user stickiness and engagement. Data is the „oil of the digital economy“ and is essential to understanding consumer preferences.
Instead of traditional B2B and B2C models, innovative B2B2C business models are the norm of the future. This model creates innovative bundles that have potential for synergy. Telcos should consider working closely with content owners, while delivering the maximum value for the consumer. It's already happening for data-intensive content services on the Internet. For instance, 3 UK offers free bundled access to The Times and The Sunday Times with its mobile broadband connections. Some telcos networks are offering free data for partner services like streaming music apps (e.g. Spotify or Apple Music) with no data charges.
While some content providers might accept lower payouts and legacy technologies, accommodating for next generation services requires a step up. Expecting best technical terms for quality customer experience is not the whim of a niche segment. Rather it's one of the prerequisites for future telco growth. In terms of mobile payments, telcos also have to watch out for credit card giants (e.g. VISA; MasterCard) and aim their commercial efforts accordingly. To thrive, they will need to strategically define and aggressively pursue growth areas.
One example of a quickly growing segment is online ticketing providers. Mobile tickets are increasingly replacing physical tickets for sports and cultural events. The same is true for public transportation tickets. It is predicted, that by 2020 already 90% of all transportation transactions will not involve the use of a paper ticket. Seamless transport ticketing becomes especially relevant in the light of global urbanization trends and large metropolitan areas.
Event venue ticketing processes have witnessed a paradigm shift. People don't book tickets at the counter any more but prefer to book them in advance from the comfort of one’s home. Global online event ticketing market size is expected to reach USD 67.99 billion by 2025, exhibiting a 4.8% CAGR during the forecast period. The global online movie ticketing services market is expected to grow even more in upcoming years – 14,6% annually. Event organizers are continuously putting in efforts to come up with an advanced and upgraded solutions to offer maximal comfort and benefit to consumers.
Mobile ticket sales are one of the major upcoming trends in the global ticket market. It’s better to be in the forefront of change and strategically pursue new trends and markets rather than lag behind and have a competitor seize the opportunity. Fortumo provides both telcos and ticketing companies with a turnkey platform to grow their sales. Interested in finding out more? Get in touch.