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Internet Telcos:

Internet giants vs. telcos

iDate
Management Report  June 2006

Single-user PDF - EUR 3000.00  

Table of Contents

presents and analyses what is really at stake as the internet’s giants make forays into the world of telecommunications, by examining the partnership opportunities available to telcos but also the threats that their traditional business areas could be facing.

The internet’s leading companies have enjoyed a stunning rise (traffic, net revenues), and have established themselves as powerful brands, thanks to a handful of extremely popular key services. Their business models are based in large part on advertising services and distribution services, both of which are low unit margin but high volume markets.

So the top online companies are working to be as big as they can, rolling out new appealing services (in some cases for free). They are essentially battling it out amongst themselves in the services market, seeking to gain a greater share of the pie, while also destroying rival services’ value by offering certain paid services for free, or at rock bottom prices.

This ongoing battle of the web’s goliaths is not without consequences for the telecom industry, however. Anxious to create new revenue streams, telcos can either elect to develop their own service offerings (Orange), or to join forces with internet portals (Yahoo!, AT&T, Google, T-Mobile) and market their services by acting as an intermediary. These partnerships do offer real opportunities, albeit varying depending on the nature of the service (blogging, IM, e-mail, mobile, etc.), and the leading operators, particularly mobile ones, are all taking very different approaches.

But portals’ appetite goes well beyond fixed and mobile services, and the Internet giants could well prove a direct threat to telcos’ longstanding business model centred on access. Recent developments are in fact allowing them to launch full frontal attacks on the Internet access (virtual operators, Wi-Fi), voice (VoIP), TV and mobile access (MVNO) markets.

© IDATE 2006 1

The Internet giants’ new activities could threaten telcos… but the threat appears to be exaggerated

• To ensure or maintain their growth, the leading online companies need to gain a distinctive edge for

their flagship services, while offering their rivals’ core services as well, be it other internet players or

telcos, notably with internet access and VoIP.

This market report provides a thorough examination of the issues at hand based on analyses by

country, by type of service and of a great many market players: portals, fixed telcos, mobile telcos:

Services analysed

• search engines

• blogging

• webmail

• instant messaging

• VOD

• VoIP

• podcasting

• RSS feeds

• auctions

• C2C commerce

• personalisation

• social networking

• communities

• online music stores

• mobile services

• Web2.0

• content

Countries examined

• Germany

• China

• South Korea

• Spain

• USA

• France

• Italy

• Japan

• The UK

The leading fixed and mobile operators’ involvement in partnerships with the Internet’s giants

Key questions
 
• What is the Internet giants’ current revenue model, and how will it evolve?
• Will web portals’ advertising model be viable in the long term?
• What are key services for Internet portals?
• Can advertising finance all the services?
• Why and how are portals competing with one another?

• What impact does the battle of the portals have on telcos?
• Can telcos come out winners by collaborating on services with one or several of the Internet giants?
• Are portals capable of threatening telcos’ traditional access-centric business model?

• How different is the situation in Western Europe, the US and in Asia (China, South Korea, Japan)? In terms of portals? In terms of fixed and mobile telecom markets?

Who should read this report?   Internet players • Understanding service operators’ positioning and strategy • Assessing the competition’s service developments, notably in partnership with operators Telecom operators (fixed and mobile) • Understanding Internet players’ global strategy • Analysing partnership possibilities with Internet players • Assessing the nature of the threat that portals pose to traditional business models Equipment manufacturers (consumer devices) • Gaining an understanding of the stakes and challenges involved in distribution for Internet players and telcos • Tracking the services market’s chief stages of evolution Investors and analysts • Analysing the overall state of competition, in Asian markets in particular • Understanding Internet players’ true impact on the telecom market • Anticipating upcoming trends in portals and telcos’ ecosystem, particularly with the advent of Web 2.0

Services analysed   • Search engine • blog • webmail • Instant Messaging • VOD • VoIP • podcast • flux RSS • auctions • commerce C2C • personalisation • social networking • communities • music store • mobile services • Web 2.0 • content

For full details, please email michellen@cmsinfo.com

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