Saturday, February 5, 2011

Study: "beliefs about rising costs and falling revenues are correct"

Tellabs published a new study: "Between November 2010 and January 2011, Tellabs created a study that analysed revenue and cost trends for carriers in Western Europe, North America and certain developed Asian markets .. Industry watchers accept that the cost of building and operating networks is rising and revenues are declining. This study aimed to develop timelines showing when "typical" carriers might expect to see costs exceed revenue"

See "Tellabs End of Profit study executive summary" - here and a press release - "Mobile operators profitability challenged within three years, says study" - here.

"The study showed that widely held industry beliefs about rising costs and falling revenues are correct. If the trends assumed in the model are followed, and carriers maintain their current modus operandi, carriers in each region can expect to see an end of profit within a four year window". See chart below for the results for the North American market.

See also "Ofcom: Mobile Data Volume +2234%, Revenues +90% (in 2 Years)" - here.

Rob Pullen, CEO and president of Tellabs said: “Mobile operators can spend themselves into a hole well before users run out of hunger for capacity .. Our study shows that simply adding capacity or ‘dumb pipes’ is an unsustainable business. To avoid the ‘end of profit,’ operators must bring intelligence to their networks – it’s critical to carrier survival.”

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