Study: modern technology fails to deliver high returns for telecoms companies

Omdia has published a study claiming that telcos' subscribers are not willing to pay more for 5G tariffs. Thus 5G technology has failed to justify investors and telecom operators' revenues could fall by as much as 5% by 2027.

Study: modern technology fails to deliver high returns for telecoms companies

Featured book: Econometric analysis Greene PDF free download

Researchers reported that ARPU (Average revenue per user) has been declining among major telcos over the past year. Omdia expects total broadband service revenue to increase by 14% to €1.2 trillion by 2027. However, the monthly average revenue per user has already begun to decline and could fall from €7.48 to €7.16 by 2027.

However, experts believe that the decline cannot be compensated by the widespread development of 5G. The whole point is that subscribers are not willing to pay more for 5G and are willing to continue using 4G.

Study: modern technology fails to deliver high returns for telecoms companies

That said, the fixed broadband market has performed better since the move to Fibre Channel. The whole point is that the new technology and the transition to it offer a tangible improvement in connectivity, which is especially important during a pandemic. But it is important to note that once a significant proportion of subscribers have migrated, operators are again starting to record a drop in ARPU. The reason for this is that companies do not know how to monetise FOCL subscribers.

Featured book: Social Psychology 13th Edition PDF free download

Omdia experts predict that by 2027 there will be 5.9 billion 5G subscribers globally, representing 70.9% population-wide penetration. The number of fibre-based fixed broadband users will exceed 1 billion, accounting for 41.9% of distribution across all households. Also, experts argue that the user never pays for the technology, but pays for the emotion, experience and convenience that the technology provides. Therefore, telecom companies should come up with ways to monetise based on this judgement.

Read also:

Certified Financial PlannerLong-Term LiabilitiesChief Financial OfficerAsset Protection TrustChief Marketing OfficerWithholding TaxGeneral Accepted Accounting StandardsLetter Of IntentWhat is scarcityChief Security OfficerProfit and Loss StatementNon-Disclosure AgreementChief Operating OfficerCertified Management AccountantNon-Profit OrganizationCertified Financial ManagerChief Technology OfficerCash FlowGross MarginAutomated Teller MachineReturn on EquityReturn on InvestmentYear-to-dateCompany FinanceElectronic Funds TransferLimited Liability CompanyClose of BusinessStagnation meaning

Business and Finance terms

Withholding Tax General Accepted Accounting Standards Letter Of Intent Scarcity Year-to-date Long-Term Liabilities Non-Disclosure Agreement Chief Operating Officer Return on Investment Chief Marketing Officer Chief Financial Officer Asset Protection Trust Chief Security Officer Certified Financial Planner Electronic Funds Transfer Limited Liability Company Close of Business Company Finance Cash Flow Automated Teller Machine Return on Equity stagnation Certified Management Accountant Non-Profit Organization Certified Financial Manager Chief Technology Officer Profit and Loss Profit and Loss Statement Gross Margin