Traditional telecoms carriers can no longer rely on conventional competitive tactics such as price cuts, promotions and basic product bundling to maintain their edge in the consumer segment, warned Gartner.
Speaking at Gartner Symposium/ITxpo, Gartner analysts said non-traditional telecoms players like Apple, Google and Nokia, which have a strong understanding of consumers, are adopting new business models that force carriers to reassess their approach and service delivery.
Faced with this competition, traditional telecoms carriers will attempt to transform themselves by primarily exploiting content, but Gartner predicts that more than 80% will fail.
"The players that will be among the successful 20% will be the ones that provide a consumer-centric experience, for example, through interactive TV, where users will be able to chat online while watching their favourite TV programmes," said Martin Gutberlet, research VP at Gartner.
In this changing landscape, the winners will be those companies that understand consumers` needs, focusing on usability and actually giving control back to the users, says Gartner. The losers will be the ones that focus on overly technical product differentiation that the majority of consumers will not understand and, therefore, not use.
Gartner predicts that by 2012, half of the 20 largest carriers will establish new lines of business outside telecoms, such as media entertainment, advertising and managed services, but more than half will fail.
Further, leading carriers in developed markets such as Vodafone and BT will be able to derive at least 15% of revenue from such non-traditional sources.
According to Gartner, three business models are emerging that will help carriers remain competitive through 2012:
* Content innovator: Content innovators produce and own their content and will use exclusive content to differentiate themselves.
* Aggregator: The aggregator model will involve the sourcing and packaging of data.
* Bit pipe carrier: A stable business model based purely on connectivity as a utility, but with both lower revenue and lower margins than today.
Said Gutberlet: "We envisage carriers will use any combination of the three business models. A company that has successfully deployed this approach is Telefonica, which was once a content innovator and, following its sale of Endemol, became an aggregator and a bit pipe carrier.
"The telecoms industry in 2012 will be very different from the one we know today. Developing strong partnership skills, focusing on customer user groups, embracing Internet services and starting to talk the language of Web 2.0 will enable the carriers to thrive well into the future," concluded Gutberlet.
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