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Top Trends in Telecom 2005 includes more than 2 billion mobile phone users
Posted on 19-Jan-2005 08:30. | Tags Filed under: News.

Deloitte's Technology, Media and Telecommunications (TMT) industry group has published their predictions for the global telecommunications industry in 2005, forecasting a year of significant milestones, as well as difficult questions.

Phil Asmundson, a Vice Chairman and Partner with Deloitte & Touche LLP and National Industry Leader for Deloitte's TMT industry group, commented, "The mobile and wireless market will overall maintain a positive trajectory in 2005. By year-end there will be close to two billion subscribers and several markets will have penetration in excess of 100%. In addition, billions of RFID tags will be deployed, marking the start of another major wireless revenue stream."

"Fixed operators will continue to reap the benefits of superior voice quality and reliability in 2005, generating billions of profitable voice minutes over the course of the year. However, they will face increasing challenges from low-cost operators, mobile operators and Voice over IP (VoIP). Broadband will continue to proliferate -- fueled by technology developments that drive demand for bandwidth -- yet profitability will decline. Wireless technologies will exhibit a similar pattern, with WiFi hotspots and WiMAX making more headlines than money. The industry's future success will hinge on reinvigorating demand for fixed-line connectivity by providing bundles of converged services; making fixed-line handsets more powerful and convenient to use; and accelerating deployment of fiber-to-the-home (FTTH)."

Three key trends identified in the report are:

1. Small talk by billions adds up to big revenue: By the end of 2005, there will be nearly two billion cellular mobile subscriptions worldwide. Subscriber growth will be strongest in developing countries (including Asia and Latin America) where mobile phones are both a transformational technology and a status symbol. Voice will continue to be the primary source of revenues and profits - on average accounting for more than 80 percent of total revenue; mobile voice volumes will continue to grow steadily due to ease of use and falling prices. Penetration will surpass 100% as more customers take a second subscription for data or for personal use; providers will structure plans accordingly and services will include automatic line switching, multiple voicemail accounts and separate billing. The most compelling and lucrative mobile content will continue to revolve around phone personalization, such as ring tones, real tones, wallpapers and basic games.

2. Strength in PSTN, VoIP and Broadband: In 2005, the vast majority of voice calls will still originate and terminate on the PSTN (Public Switched Telephony Network) due to superior call quality and overall reliability. PSTN operators will reduce prices in response to the competition from low cost providers (mobile and VoIP), causing margin pressure. They should focus on marketing their superior capabilities and investing in full-featured phones with key convenience features, such as stored number dialing, text messaging and conference calling, to stimulate call volume over fixed lines.

3. RFID: In 2005, RFID will finally make it out of the lab and into the commercial world. The combined influence of major retail chains, defense contractors, automotive manufacturers and others -- all of whom are requiring suppliers to use RFID -- will prompt a massive increase in RFID adoption, starting from essentially zero. By the end of the year, more than 10 billion RFID tags will have been sold and used. RFID is not just a replacement for barcode; it is a transformational technology that can help reduce waste, curtail theft, manage inventory, streamline logistics and even increase productivity. Collecting, collating and presenting all of that RFID data will become a very sizeable industry, with IT companies grabbing the lion's share of revenue. RFID readers and other hardware will also represent a very healthy market. RFID applications will also be used in healthcare (for monitoring patients), construction (for managing projects and equipment), and even transportation (for monitoring baggage and passengers in airports).

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