As business combinations make some telecom providers larger and more diverse,
with increased triple and quadruple play offerings for customers, there will
also be room for much smaller, niche companies to be very profitable.
Room for Small, Niche Players
Frontier Communications’ announcement of $40 million to expand broadband in
Illinois in 2011, part of its goal to provide 85 percent of its Illinois
customers with broadband by 2013, will provide higher revenue services in areas
where the company is the only or one of only a couple of choices for such
services in the state, according to Sapien.
Beyond the desire for additional revenues, the company was likely under some
pressure to expand its broadband offerings as a result of the approval of the
acquisition of the $8.6 billion in wireline assets from Verizon, according to
There will also be room for much smaller, niche companies to be very profitable.
Ovum predicts that the market for MVNOs will hit 85.6 million connections in
2015, up from 53 million in 2009. Meanwhile revenues will reach $9.5 billion in
2015, up from $8 billion in 2009.
Change at the Top
The month also saw the announcement of the passing of the torch at Amdocs
Limited. Dov Baharav, the company’s president and CEO, will retire in the first
quarter of calendar 2011 and will be replaced by Eli Gelman, a current director
and former executive vice president and chief operating officer.
“Dov began his tenure at a difficult time
for the company and led it to new
heights,” said Amdocs chairman Bruce
Anderson. “During his years as CEO,
Amdocs doubled its revenue,
The market for ‘no frills’ mobile operators such as Tesco will increase over the
next five years as more and more people opt to select their service as they
shop, according to a recent Ovum report.
The supermarket giant and other established retailers will see increased success
in the ‘no frills’ mobile market as more people turn their backs on traditional
players and go for convenience, according to Ovum.
Tesco and its counterparts are mobile virtual network operators (MVNO), buying
minutes from traditional players to sell to their own customers.
It is a model that works well, as all the
retailers need to do is free up shelf
space for their mobile offering, then
focus their resources on marketing,
distribution and sales, leaving the
networking issues to the traditional
significantly grew its product and
services portfolio, expanded its global
presence, and, ultimately, became the
world’s leading provider of customer
It’s unknown at this time what changes might be in store for the company
stemming from the change in leadership. During the conference call following the
announcement of the change in early September, Gelman said: “I think it's a
little bit premature for me to strategize. I can tell you in terms of my
personality and the way I look forward, I like to do big things and to take the
company to higher places and new places. But whether it is in one direction or
the other I think it will be almost irresponsible for me to really share it with
you at this time.”
The new business combinations among telcos will provide Gelman with some
interesting challenges in the years ahead.