International Wholesale Carriers - New Business Models & Growth Drivers in the Digital Transformation Era

  • ID: 4239926
  • Report
  • Region: Global
  • 70 pages
  • GlobalData
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FEATURED COMPANIES

  • Aicent
  • AWS
  • BT Global Services
  • China Telecom
  • Comfone
  • Google
  • MORE
International Wholesale Carriers - New Business Models & Growth Drivers in the Digital Transformation Era

Summary

Global telecoms industry is adjusting to a series of systemic threats brought about by changes in technology, regulation, competition and business models. From the explosion of data traffic in mobile and fixed networks to the competitive challenge presented by OTT players, service migration to the cloud or the emergence of IoT, retail telco providers are facing a seminal disruption to their business models.

Global wholesale carriers are under substantial pressure to accelerate the rollout of new services and reduce their exposure to voice. The explosion of data traffic is offering a path to doing just that, breathing new life into the wholesale business.

Network and managed services segments have become strategically vital to the outlook of the wholesale business, driving revenue growth, boosting margins and re-establishing wholesale providers as critical cogs in the digital service ecosystem. For wholesale carriers without strong network services businesses, new questions are being raised on how to transform their models - or whether to stay in the wholesale voice and VAS business at all.

Wholesale providers also face dramatic changes in the nature of demand for their services. There is sustained demand from traditional customers, whose requirements are rising in complexity. There is also the emergence of new sources of demand from retail providers of various stripes (MVNOs, OTTs and MNCs) looking to harness new technologies to offer highly customized services, improve production or delivery processes or integrate communications into their service delivery chains - all, very often, on a regional or global scale.

For independent global wholesale voice providers, we argue that an expansion of the service portfolio (organically or through M&A) is imperative - absent which an exit should be at a minimum a strong consideration. Wholesale mobile data providers are in a better strategic position: they are well-positioned in a growing segment. The wholesale player of the future will offer a more complex, more dynamic global traffic and network distribution platform, one capable of adapting to a multiplicity of use cases - e.g., e-health, e-education and smart cities - on a global (or regional) scale, with high levels of quality, resilience and security.

The “International Wholesale Carriers - New Business Models & Growth Drivers in the Digital Transformation Era” analyzes the changing dynamics, the new growth drivers and business models of the global international wholesale industry. It lays out for international carriers the critical considerations and strategic options for taking the journey to the wholesaler of the future, from the business model drivers to the necessary portfolio evolution requirements.

In particular, this report provides the following analysis -
- Provides an analysis of the current and future dynamics shaping the telecom industry, from data traffic explosion to IoT, cloud and virtualized networks.
- Examines the impact of the changing telecom industry dynamics on the global wholesale market, in terms of revenues, margins, and traffic and growth drivers. We also look at the evolving nature of demand for wholesale services.
- Provides the different wholesale carrier strategic groups - based on their portfolio breadth, network depth and business purpose - then assesses and lays down the different strategic options - in terms of business models and strategic actions- available to each group to position itself successfully for a wholesale future.
- Provides an overview of how wholesale portfolios should evolve and expand to meet the new demand dynamics coming from traditional and new customers.
- Provides a set of key findings and recommendations on the international wholesale industry’s evolving dynamics, new growth drivers and business models, and we also provide strategic recommendations for international carriers to position themselves for growth.

Companies mentioned in this report: Aicent, AT&T, AWS, BICS, BT Global Services, BT Wholesale, China Telecom, Colt, Comfone, GCX, Google, iBasis, IDT, KPN, Lebara, Level 3, LycaMobile, Mac, Microsoft, Orange, PCCW Global, SAP, Syniverse, Tata Communications, Telefonica, Telenor Wholesale, Telstra, Vodafone, AT&T, AWS.

Scope

- The global telecoms industry is in a state of transition, retail telco providers are seeing their models disrupted by a series of systemic threats and new digital opportunities. These winds of change are impacting global wholesale providers, as traffic fundamentals and traditional economics get upended and as the nature of the wholesale demand changes. Global wholesalers need to evolve towards new business models and service portfolio in order to unlock the new wholesale growth drivers in the digital transformation era.
- Traditional wholesale voice traffic margins have been in persistent decline over the past three years, this has put substantial pressure on carriers to accelerate their rollout of new services. The explosion of data traffic, by contrast, is breathing new life into the wholesale business. Network services and managed services segments have become strategically vital to the outlook of many players.
- Wholesale providers face sustained demand from traditional customers whose requirements are rising in complexity (e.g. pay-as-you go billing, dynamic bandwidth allocation). There is also the emergence of new demand channels from retail providers of various stripes (Cloud providers, MVNOs, OTTs, MNCs).
- As they seek to transform, the strategic options available to wholesale providers are a function of each individual player’s strategic position in the wholesale market, the depth of their product portfolio, the reach and depth of their network - and most critically, their overall business purpose.
- Depending on the wholesale carrier group, the strategic options may include actions such as portfolio expansion, M&As, reducing exposure to voice, targeted investments, units combination, new pricing structures. These are thoroughly detailed in the report.

Reasons to Buy

- The report examines the changing dynamics, the new growth drivers and business models of the global international wholesale industry.
- The report provides valuable insights and recommendations for international carriers on the critical considerations and strategic options for taking the journey to the wholesaler of the future and position for growth.
- The report’s case studies provide real examples of market approaches, postitionning, product portfolios and strategies being employed by a number of carriers that have started their journey to the wholesaler of the future, along with others that urgently need to.
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FEATURED COMPANIES

  • Aicent
  • AWS
  • BT Global Services
  • China Telecom
  • Comfone
  • Google
  • MORE
Table of contents
List of exhibits
Executive summary
Section 1: Market Context - Winds of Change in the Global Telecoms Industry
The global telecoms industry is in a state of transition
Data explosion and the OTT disruption
Migration to the cloud and virtualized networks
Getting ready for a new world: IoT growth
Section 2: The Evolving Global Wholesale Market
The global wholesale market is not immune from broader industry headwinds
A pervasive decline in traditional international voice traffic flows
Voice revenue is declining and margins are getting tighter 18-
Roaming regulations have compounded the pressure on wholesale termination
The data bandwidth explosion is breathing new life into wholesale
The data segment is already driving wholesale business growth
Wholesale carriers are investing in subsea cable projects to respond to the data bandwidth explosion
The evolving nature of demand for wholesale services
From bulk transport to strategic wholesale solutions
Section 3: Positioning for a Wholesale Future - An Assessment of Strategic Options
Drivers of strategy: portfolio breadth, network depth and business purpose
Where individual wholesale units fall
Strategic options are a function of wholesale carrier strategic groups
Strategic options: the stand-alone wholesale voice focused provider
Strategic options: the stand-alone wholesale mobile data focused provider
Strategic options: the stand-alone wholesale network services focused provider
The support wholesale voice/data focused provider - overview of strategic options
The support wholesale voice/data focused provider - global scale means more options
The support wholesale voice/data focused provider - narrow scale means high-risk zone
Strategic options: the support wholesale network services focused provider
Section 4: The Changing Nature of Wholesale Service Portfolios
The new addressable base is forcing wholesale providers to expand their portfolios
LTE roaming - the next step
Network services - cloud transit
Network services - bandwidth on demand
Wholesale analytics
White label IoT solutions
Vertically-focused wholesale solutions
Section 5: Wholesale Carrier Case Studies
BICS
Tata Communications
Syniverse
Section 6: Key Findings and Recommendations
Appendix
Acronyms and definitions
Companies mentioned
About the authors
Contact information

List of Tables
Exhibit 1: Key retail telecoms industry trends
Exhibit 2: Global mobile broadband connections
Exhibit 3: Sample telco NFV plans
Exhibit 4: Global B2B IoT connections
Exhibit 5: Overview of key wholesale market macro trends
Exhibit 6: Average annual decline of international voice traffic - 2013-16
Exhibit 7: Quarterly revenue growth for sample global carriers
Exhibit 8: Voice margin for sample global carriers (2016)
Exhibit 9: EU wholesale roaming rates
Exhibit 10: Kenya used international capacity growth
Exhibit 11:Singapore 4G and fiber penetration
Exhibit 12: Singapore international capacity sold - 2011-14
Exhibit 13: Voice vs. data margin growth for sample operator
Exhibit 14: Data contribution to wholesale margins for sample operators
Exhibit 15: Sample wholesale carrier subsea cable projects
Exhibit 16: Evolution of demand dynamics
Exhibit 17: Wholesale services demand landscape
Exhibit 18: Key drivers of wholesale carrier strategy
Exhibit 19:Strategic mapping of global wholesale carriers
Exhibit 20: Key wholesale carrier strategic groups
Exhibit 21: Global wholesale carriers’ strategic options mapping
Exhibit 22: Overview of Telstra’s cloud gateway service
Exhibit 23: Overview of Microsoft Azure express route connectivity partners
Exhibit 24: COLT on demand - sample key usage steps
Exhibit 25: BICS - main sources of wholesale business margins (2015)
Exhibit 26: BICS - evolution of wholesale traffic
Exhibit 27: BICS - evolution of wholesale revenue & margins (2011-16 CAGR)
Exhibit 28: BICS - wholesale strategy
Exhibit 29: Tata Communications - structure of revenue (2016F)
Exhibit 30: TCL - voice vs. data services growth
Exhibit 31: TCL - voice contribution to revenue and EBITDA
Exhibit 32: TCL - structure of total addressable opportunity
Exhibit 33: Syniverse international presence build-up
Exhibit 34: Syniverse key roaming product lines (2016)
Exhibit 35: Evolution of Syniverse revenue
Exhibit 36: Syniverse LTE roaming coverage for GSM operators
Exhibit 37: LTE vs. non-LTE roaming traffic

List of Figures
Exhibit 1: Key retail telecoms industry trends
Exhibit 2: Global mobile broadband connections
Exhibit 3: Sample telco NFV plans
Exhibit 4: Global B2B IoT connections
Exhibit 5: Overview of key wholesale market macro trends
Exhibit 6: Average annual decline of international voice traffic - 2013-16
Exhibit 7: Quarterly revenue growth for sample global carriers
Exhibit 8: Voice margin for sample global carriers (2016)
Exhibit 9: EU wholesale roaming rates
Exhibit 10: Kenya used international capacity growth
Exhibit 11:Singapore 4G and fiber penetration
Exhibit 12: Singapore international capacity sold - 2011-14
Exhibit 13: Voice vs. data margin growth for sample operator
Exhibit 14: Data contribution to wholesale margins for sample operators
Exhibit 15: Sample wholesale carrier subsea cable projects
Exhibit 16: Evolution of demand dynamics
Exhibit 17: Wholesale services demand landscape
Exhibit 18: Key drivers of wholesale carrier strategy
Exhibit 19:Strategic mapping of global wholesale carriers
Exhibit 20: Key wholesale carrier strategic groups
Exhibit 21: Global wholesale carriers’ strategic options mapping
Exhibit 22: Overview of Telstra’s cloud gateway service
Exhibit 23: Overview of Microsoft Azure express route connectivity partners
Exhibit 24: COLT on demand - sample key usage steps
Exhibit 25: BICS - main sources of wholesale business margins (2015)
Exhibit 26: BICS - evolution of wholesale traffic
Exhibit 27: BICS - evolution of wholesale revenue & margins (2011-16 CAGR)
Exhibit 28: BICS - wholesale strategy
Exhibit 29: Tata Communications - structure of revenue (2016F)
Exhibit 30: TCL - voice vs. data services growth
Exhibit 31: TCL - voice contribution to revenue and EBITDA
Exhibit 32: TCL - structure of total addressable opportunity
Exhibit 33: Syniverse international presence build-up
Exhibit 34: Syniverse key roaming product lines (2016)
Exhibit 35: Evolution of Syniverse revenue
Exhibit 36: Syniverse LTE roaming coverage for GSM operators
Exhibit 37: LTE vs. non-LTE roaming traffic
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  • Aicent
  • AT&T
  • AWS
  • BICS
  • BT Global Services
  • BT Wholesale
  • China Telecom
  • Colt
  • Comfone
  • GCX
  • Google
  • iBasis
  • IDT
  • KPN
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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