Mobile data undermines legacy business: analyst

 

Across the region, telcos are expected to grow an average of 4-5% annually over the next three years. "That's clearly not what we're used to."

 

The fastest growth is in Indonesia, with revenue and ebitda expected to expand by about 10%.

 

With growth in voice minutes also slowing quickly, he said it's not surprising that data gets everyone excited because they see it as the next growth driver. "Everyone is hoping that all the forecasts are wrong and we'll get back to 10% revenue growth."

 

Operators have not been good at monetizing the data opportunity. He noted that telcos feel they need to encourage usage by first getting people on the network before they start finding ways to make them pay. "What this means is there is an increasing disconnect between usage and revenue."

 

A good example is StarHub, where Q2 revenue increased 30% while data volumes were up about 100%.

 

He said a lot of telcos say they don't want to compete on flat-rate bundles since everyone knows it destroys the business case. But when put under pressure by competitors, he said, “it's amazing how quickly they move to all-you-can-eat plans.”