Study: Wireless Carriers Face Stiff Competition
If the FCC is concerned about the major wireless carriers becoming too powerful in the broadband delivery space where it expects most media to be delivered -- and it clearly is -- a new report from The Cambridge Strategic Management Group might help assuage some of those fears.
According to the study, a variety of factors, from over-the-top voice competition to Wi-Fi operators are helping "shift value away from established mobile industry players." It predicts that Wi-Fi could take an $8 billion chunk out of wireless carriers' revenue by 2016.
The report, Signal Strength: Assessing Value Shifts in the Mobile Telecommunications Industry, says "established players can no longer rely on the rising tide of demand to guarantee growth," given tablets, cloud-based services and other disruptive factors.
In fact, the report cites a host of threats to the view of incumbent wireless carriers as poised to dominate the market and the bottom line, arguing that one way to defend against over-the-top services like Skype is to offer unlimited voice and messaging.
Here are some of those threats.
- Over-the-Top Threat: Mobile service providers face potential value erosion from over-the-top voice and messaging substitution.
- New Entrant Threat: Disruptive new mobile service providers may capture share from incumbents.
- Mobile Data Traffic: Mobile data traffic growth will challenge service providers' network capacity and data profitability.
- Smartphone Profitability: Late adopters of smartphones will be less profitable to mobile service providers than earlier adopters.
- Mobile Content Proliferation: Mobile service providers are being disintermediated from mobile content as third parties capture a disproportionate share of value."
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.