Ever wonder how much money the telecom industry spends on new technology as it moves from 3G to LTE to whatever is next? A lot. Telecom companies spend almost 15 percent of their revenue each year in capital expenses for their network. With industry revenue at $2 trillion, that translates to a whopping $300 billion in investments across the industry each year.
How much faith do telecoms have that these investments will pay off? Not as much as you might think. According to a Telco Insights blog post this morning, telecom operators don’t make money on many of the services traveling down their data network. For example, they don’t see revenue from videos their customers watch on Netflix. So where will revenue come from? More than 3,000 industry leaders are gathering to discuss just that at the TM Forum this week in Nice, France. Much of the discussion focuses on how to move from communications services to digital services – and cloud computing is a key part of providing digital services, which is a big reason why Microsoft is participating at the event.
Microsoft’s goal in the industry is to help telecom operators tap into cloud opportunities and, in the process, achieve a stronger return on investment. An example of a company already doing this is Telstra, one of the best-known telecommunications and information services brands in Australia. As revenue streams involving traditional voice decline, Telstra is developing alternate revenue sources that complement their existing data center services with hosting and email messaging.
Telstra’s cloud service taps into several Microsoft products on display at this week’s event: Windows Server 2012, System Center 2012 and Office 365. As related in a separate blog post, another Microsoft offering with a lot to offer telecom companies is Windows 8 and Surface. Find out why, and return to the Telco Insights blog for more information.
Steve Clarke
Microsoft News Center Staff