Johannesburg, 06 Sep 2006
The converging global telecoms market is forcing traditional telecommunications companies (telcos), whose primary income is from voice traffic, to evolve or die, as alternative technologies and applications make inroads into their once sacrosanct revenue streams.
This is the view of Andy Brauer, chief technical officer at Business Connexion, who says that as convergence takes place, there is a fundamental shift towards cost-effective communications, with many industries competing to get their share of the market. The ultimate beneficiaries of this are end-users and the companies that make use of these services.
"In order to maintain their revenue streams, these telcos are going to have to start adding value to their services, as they are already being rivalled by mobile providers. Other service providers and value-added network service (VANS) providers are also beginning to play in the voice market, increasing the competition," he states.
"Mobile providers in particular are being innovative in this regard, adding value to their telephony components through applications like 3G video clips or video conferencing. They seem to be aware that new projected revenue streams will come from applications, rather than from the underlying technology that delivers them."
Brauer also says that in order to provide content-rich applications, mobile operators will have to consider moving away from GPRS technology. Providing multiple applications on a single device requires a different way of looking at technology.
As an example of how service providers have begun to `think outside the box` and the way new technologies are impacting the market, he points to the mobile collaboration with Standard Bank to facilitate online banking by phone, effectively turning the mobile device into a virtual wallet.
"In reality, the true driver behind many of the new technologies is the need for entertainment. Business applications generally do not use a great deal of bandwidth. On the other hand, entertainment applications - such as streaming videos or games - are the real high bandwidth applications," he claims.
"Looking into the future, I think we will see more players looking to capitalise on what is termed the `4G approach` - girls, gambling, games and gifts. These are seen as the most important drivers in entertainment terms."
He indicates that a whole subculture already exists within the youth market, and this is driving new developments, such as screensavers, ringtones and a host of SMS-based applications.
"The global ringtone market is worth an estimated $70 million already, and is growing all the time on the back of what I call the `Crazy Frog syndrome`," he states, referring to the current ringtone fad sweeping the world.
"It boils down to a version of Maslow`s hierarchy of needs. As a society`s standards are raised and we move beyond satisfying essential needs, people`s expectations change. This is why there is now a global move towards developing items that until recently would have been considered luxuries," says Brauer.
"Interactive gaming is a luxury market that I believe more and more players will start to look into, especially as the average age of today`s gamers is around 30, and people in their 30s have money to spend on luxury applications."
Looking further into the future, Brauer believes that we will soon see technologies like 3D Internet and true virtual reality coming to the fore.
"I also think we will be surprised by the next `must-have` commodity - like cellphones are today - with it quite conceivably being something like glasses with a built-in phone and MP3 player and the potential to surf the Internet via a miniature heads-up display.
"This may sound a little over the top, but I believe that generally speaking, we have a much better grip on where technology is going today, than people did a few decades ago, so there is a much greater likelihood of our visions of the future actually coming true," he concludes.