Hanging Up
We found this comment interesting from a global analyst we really like…
“Over the last several years…incumbent service operators [have been] under attack by disruptive technology innovations. Today, young adult/teenage users make traditional phone calls less and less, instead using social chat apps like SnapChat, WhatsApp, Twitter, Instagram, Tumblr and, now, increasingly Voxer. Voxer is a free, easy to use “push to talk” walkie-talkie style voice communication system similar to the now defunct iDEN Nextel network. Voxer and other similar applications are known as “Over-The-Top” (OTT) technologies, which use a standard broadband connection, wireless or fixed, to send video and audio or other content, bypassing the traditional telco network protocol for the control or distribution of the content. Already with tens of millions of users, Voxer is now expanding into the business market, with low-cost plans providing additional features. Voxer and other OTT applications are increasingly proving highly disruptive to service provider’s traditional business model, cannibalizing high margin SMS and voice revenues. To survive, more than ever, operators need a willingness to reinvent themselves, and greater economies of scale.”
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
danielgillick
:
Interesting comment Roger. A good example of disruptive innovation at play.
The trajectory of performance for conventional TSPs was initally very different to emerging online communication platforms; typically operating at lower-margins, and within the periphery of TSPs. As has been seen, these platform have diversified in their applications and usages, particularly as integration of mobile hardware and software has improved. Now, the trajectory of performance of these platforms align with the path of the TSPs, becoming the silent competitor, and slowly eating away at their existing customer base, while opening up new customers.
Similar phenomenon has been seen in the delivery of higher education and health services in recent years.