In 2012 the Internet, telecoms and electronic media markets saw a marked slowdown in growth, rising by only 2.7%. Nothing to worry about there, reckon the experts.
In 2012 the global market for telecommunications services generated revenue amounting to €1.12 trillion. And the digital sectors as a whole – which include telecoms equipment and services , computer software and IT services, television, consumer electronics (audio and video) and Internet services – posted turnover of €3.17 trillion, up 2.8% on 2011. In spite of the revenues flowing in from Internet innovations, some people are now asking if ICT-linked growth is perhaps running out of steam, and whether digital can still act as the driver of a new growth cycle. For the 13th year running, researchers at IDATE, a consulting and research institute based in Montpellier, France, have published a report on the challenges of the digital economy in their ‘Digital Yearbook ‘, which lists the various trends in what they call the ‘DigiWorld’. This year the report confirms the conclusions of a study from the GSM Association, on which l’Atelier reported recently, i.e. that Europe is falling behind in this sector.
Digital innovation driven mainly by mobile
According to IDATE, the number of Internet subscribers is set to reach a billion within four and a half years – an increase of 37.3% between 2012 and 2017. But more importantly, the number of customers using mobile devices is expected to pass the eight billion mark globally in 2017 – representing a rise of 28% in five years. IDATE predicts that the technology segment will itself be propelled by high-speed mobile broadband (4G), which should see 70% growth over the next three years, compared with just 15% for all fibre optics . However, the European telecoms market, which is currently in recession, is not matching up to the dynamic on the other side of the Atlantic, where the United States is forging ahead with its deployment of 4G. According to IDATE, the telecoms sector in Europe is set to remain more or less flat – with just 0.3% estimated growth – in comparison with 15% in the United States, 26% in Asia and a massive 57% in Africa. IDATE forecasts that worldwide ‘DigiWorld’ turnover will reach €3.66 trillion in 2016, with €1.25 trillion coming from telecoms services and €332 billion from mobile payments, the cloud and e-commerce.
OTT service providers winning market share
At a time when telecoms operators are experiencing flat income, ‘over-the-top’ (OTT) service providers – so designated because they relay third-party content over their network – such as Google and Amazon are seeing their revenue increase by some 15% a year. However, according to IDATE, this is not necessarily bad news for the telecoms operators as there are plenty of digital ‘goldmines’ to be exploited. In order to survive, telecoms companies should not only emulate the business models of OTT companies, they should also seek to collaborate with these content providers as the sector value chain of the sector is now undergoing a metamorphosis, advises IDATE. Meanwhile the major digital platforms, which are for the most part US-based, are becoming ever more powerful. However IDATE puts its arguments into perspective by reminding the reader that these new Internet services still account for only a twentieth of overall telecoms services.