Going mobile
One promising trend for the APAC wholesale space is mobile. Market analysts estimate the region will have between 3 billion and 4 billion mobile connections by 2020 (remembering that a significant number of markets already have SIM penetration well over 100%).
Malcolm Chan of BICS Asia says, “We are seeing growth across our mobile data business in terms of messaging, roaming and data analytics.”
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BT Global’s Donazzolo says that trend presents revenue opportunities to the more established wholesalers for things like mobile data roaming, signaling and voice, but he cautions that the opportunity for revenue growth comes with a limited window.
“Consumers in many countries in the region are extremely price-sensitive, triggering fierce competition among mobile operators and ultimately subscriber churn,” he says. “These developments can and often do exert significant downward pressure on wholesale product and service prices.”
That said, another mobile-related opportunity is coming in the form of MVNOs (mobile virtual network operators) entering markets and competing for new subs. But while the GSMA Intelligence Unit counted almost 1,000 MVNOs globally at the end of 2014, most of them are in North America and Western Europe. Asia Pacific has been lagging on the MVNO front, in part because of regulatory issues.
But that’s changing, Donazzolo says. “China, for example, has some 20 MVNOs in the country. The MVNO market may therefore present wholesalers with new sources of revenues with respect to both traditional and non-traditional wholesale services as it stiffens competition in their home and regional markets.”
Operator outsourcing
Another trend fueling telecoms wholesale, says Donazzolo, is rapid retail service innovation cycles in the region, and the increasing complexity of retail packages by operators aimed at consumer and business segments.
“In such scenarios, an efficient and effective wholesale service sector is increasingly key because many telecom operators cannot do everything themselves and must rely on third-party suppliers,” he says.
An example of this is IPTV, pegged as a significant growth market over the next five years, driven by subscriber growth and investment in VoD services, interactive services, and multi-view/multi-screen services, as well as pure-play IPTV services and the rise of OTT players like Netflix and HOOQ.
“These trends will drive greater demand for wholesale media and broadcasting value propositions from established regional and global wholesale players with the scale, reach and skillsets to transmit and deliver live and non-live content,” says Donazzolo.
New opportunities
Meanwhile, as domestic telecoms players hunt for new service opportunities spurred by demand for anytime-anywhere digital services, that spells new business opportunities for wholesalers as well.
Ellie Sweeney of Telstra is particularly bullish on the Internet of Things. “The Internet of Things has the potential to be a real game-changer. The number of connected devices is forecast to top 50 billion by 2020, and this will transform virtually every part of the economy and create an environment for new businesses, indeed possibly whole new industries, to emerge.”
Donazzolo of BT Global says there are now signs that the more established wholesalers are re-inventing themselves to address a far greater variety of service segments across the telecoms sector by launching white-label wholesale value propositions such as M2M, cloud platforms, connected home, security, heath, voice and video conferencing solutions and unified communications.
“These counter-strategies have gained a lot of strength and momentum over the past few years, with many ICT related infrastructures and services now well integrated into wholesale portfolios,” he says. “These developments are indicative of a wholesale sector in Asia Pacific and globally that is embracing complex resell models and moving towards the very interesting bundling of connectivity with hosted IP based communications and services.”
Malcolm Chan of BICS Asia says that in the near and medium term, “BICS is optimistic around the market for A2P messaging where we see more operators looking to monetize new revenue streams and VoLTE where we expect further convergence between voice and mobile data in the coming years. We have been growing our presence with our bundled messaging solutions and by being the first in the world to facilitate VoLTE interworking between SK Telecom and Proximus and are ready for VoLTE roaming.”