Telcos have indirectly cultivated the connected population with its business nature of offering Internet and cable TV all under one roof
BY JOSEPHINE TAN
How many aspects of lives can a typical telecommunications company possibly touch? It can be a telephone and mobile service provider for consumers and businesses, a cable or satellite TV operator to pay-TV subscribers, and the Internet service provider to an increasingly growing connected population.
Unlike many other industries which are now journeying through the maze of digital disruption, telcos have always stayed at the edge of technological advancements by expanding its business portfolio. Its traditional fixed telephone business has quickly evolved into mobile, in addition to further investments in media and broadband services, all of which make up a telco’s core competencies in today’s market.
For instance, in Singapore, StarHub ventured into the broadband business as early as 1999 with the acquisition of Internet service provider CyberWay. And in 2002, the telco expanded its footprint into the media industry with the merger of Singapore Cable Vision (SCV).
In the US, AT&T has invested heavily in the media sector with the acquisition of DirecTV in 2015, and more recently, the acquisition of Time Warner.
Because of its business nature, telcos are also now at the heart of the convergence between the media space and the Internet space. This is evident particularly from the AT&T-Time Warner merger, which, according to AT&T, was a “logical step” for both companies in a world where the future of media and entertainment is rapidly converging around the three elements — premium content, direct-to-consumer distribution, high-speed networks — required to transform how video is distributed, paid for, consumed and created.
However, this convergence of media and the Internet was brought forth by over-the-top (OTT) service providers like Netflix and Amazon Prime Video. As much as these platforms require telcos’ broadband and mobile Internet services to deliver their content to subscribers, they are also competing for content and audience with telcos in the media space.
In facing this new consumption pattern, the term “cord-cutter” is now more common than ever before. According to research firm eMarketer, the number of cord-cutters in the US es expected to climb 32.8%, to 33 million adults, in 2018. This is compared to a total of 24.9 million cord-cutters as of the end of 2017, which in itself was up 43.6% year-over-year.
Convergence brings along both opportunities and challenges. New entrants add values to every industry but the key in remaining competitive in this landscape is change — exploiting new business models is perhaps an approach that will help companies stay ahead of the competition.