Not even mobile Internet revenue growth is going to be enough to support continued gains by service providers globally, argues Infonetics Research, so new sources in the Internet of Things and machine-to-machine communications area are essential, according to ABI Research.
Some disagree, but the consensus seems to be that mobile services aimed at machines and sensors is the next great mobile revenue growth area.
“Overall, growth in telecom revenue continues to slow in every geographic region,” according to Stéphane Téral, Infonetics Research principal analyst.
Europe’s five largest service providers—Deutsche Telekom, Orange, Telecom Italia, Telefónica, and Vodafone—continue to experience declining revenue, though less pronounced than in the past three years, he noted.
Global mobile service revenue barely budged in the first half of 2014, up just 0.5 percent from the same period a year ago, Infonetics says.
“The only way to achieve organic growth is to provide more value-added services, and Machine to Machine (M2M) is definitely one of the areas with tremendous opportunities,” said Lian Jye Su, ABI Research research associate.
ABI Research forecasts that the M2M market, also called the Internet of Things market, will grow to US$174 billion in 2019, up 200 percent from 2014 levels.
ABI Research believes “the struggles of mobile operators will become more intense,” as capital expenditure and operating expenditure grow due to 4G services, while average revenue per user is in continual decline.
Among the value added services ABI Research believes are promising are device and connectivity management; application development; device cloud services; data management; analytics; device design and development and professional and consulting services.
MVNO and M2M infrastructure providers such as Aeris, KORE, Numerex, and Wyless are all adding new services and repositioning as M2M solution providers, ABI says.
In September 2014, AT&T announced its global “Single SIM Solution” that enables enterprises globally to connect devices, machines, and others via a single platform.
On the other hand, ABI Research also sees promise in digital content, mobile money, big data monetization, advertising and enterprise cloud solutions.
“We strongly believe that mobile operators can no longer rely solely on the growth of data revenue, as the growth is unable to reverse the current trend of decline,” said Jake Saunders, ABI Research VP.
Not even network neutrality rules are likely to matter.