PHOTO - Tellabs Communications Malaysia regional manager, strategic network consulting, Wong Kian Soon.
Telco services provider Tellabs Communications' study shows that Asia Pacific telcos could face the end of profits by 2014, said the company.
Tellabs Communications Malaysia (Tellabs) regional manager, strategic network consulting, Wong Kian Soon, said: "The company commissioned Analysys Mason to conduct the study, which broadly shows that carriers risk an 'end to profit' sometime before mid 2015. In certain regions, this point could be reached much sooner."
Wong said the study, between November 2010 and January 2011, analysed revenue and cost trends for carriers in Western Europe, North America and certain developed Asian markets
(Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan). "Beginning 2011, we commissioned a study to ascertain when operators would start to lose profit of from the current business model, called The End of Profit, which was followed by another study of the value of intelligent or smart pipes on the mobile network operators."
"There is an urgent need for new business models based on realising the value of 'smart' pipes to mobile network operators," he said. "It is clear that carriers are facing significant challenges in balancing cost and revenue. Existing network architectures are ill equipped to cope with the dual challenge of sustained data demand and falling revenues. To avoid an end of profit, carriers must fundamentally rethink the design and capabilities of their networks."
"In addition, the mobile Internet is forcing the transformation of carrier networks and business models," said Wong. "New smartphones, new services and more subscribers combine to put greater demands on mobile networks. New applications like mobile social networking and mobile video services often provided as over the top services put increasing demands on how voice and data traffic is handled."
"It is imperative now that carriers consider more efficient, smart ways to handle mobile Internet traffic," he said. "Mobile Internet is disrupting the business models of providers and the user experience, is expected to grow sevenfold by 2015. Changes are taking place in user devices, applications and the mobile technology, which will primacy network infrastructure, network provider revenue and user experience."
Established in Malaysia in 2000, Tellabs serves most of the Tier 1 mobile service providers in the country, and also operates in 100 countries with 3,400 staff while serving 43 of the top 50 service providers operating around the world.
Wong said one example of how devices are changing is the advent of M2M (machine to machine) communication through the Internet. "Applications are changing to reflect more non-voice data across the networks, while bandwidth is more than doubling every year through to 2014."
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