Nigel Eastwood, CEO, New Call Telecom shares his two cents on how 2015 will shape for the telecom industry. He says that there is still huge pent-up demand for telecoms services in the burgeoning middle classes and aspirational consumers in the emerging markets.
New Call Telecom in the UK is based in London and is part of the New Sparta Group of companies. New Call Telecom was founded in 2010 when its chief executive Nigel Eastwood led a management buyout of the business from its US parent PTGi. With over 750,000 annual subscribers, New Call Telecom is a leading provider in the UK for residential telecom market through its newly renamed product Fuel Broadband, providing phone and broadband packages, including low cost international calls services.
New Call Telecom recently established a company in the Netherlands as a platform for it's international acquisitions. The company noted that they are planning further acquisitions in India and the UK this year and the group revenues are projected to pass $200m during 2015. Nigel's predictions are outlined below:
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Increased adoption of smartphones leading to demand for internet connectivity and digital services: Over the last 12 months, the nature of this demand has changed. In the place of fixed-line services, the adoption of smartphones by consumers has created significant demand for Internet connectivity and digital services in all its forms. In 2015, this trend will accelerate.
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Instant messaging and 'in-app' calling: The biggest growth area will be instant messaging and 'in-app' calling through applications like Skype, WhatsApp and Nimbuzz. A recent GlobalWebIndex survey found that instant messaging applications grew by a massive 113% over the last 2 years, driven by their low cost, the rising number of people who carry smartphones as well as the lack of the infrastructure to carry landline calls to remote regions.
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Competitive pricing and packages from service providers: This is something that will appeal to ambitious telecoms companies because, over the last few years, profitability from selling fixed-line connectivity has come under pressure. There has been a fierce price battle among telcos for voice services, driving down prices to almost unprofitable levels. At some point, they will have to adjust their price points upwards, but this will drive more people to the very instant messaging and VoIP services that are, perhaps, already cannibalising their sales.
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Tailor-made offerings as differentiator: In anticipation of this shift, telcos have already started to tailor their product offering, concentrating, instead, on selling unlimited data packages and competing on speed, price and coverage. But, this is only a short-term solution to the wider problem. As more companies enter this territory, prices and profits may also decline, leaving margins razor thin again.
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More M&As in the telecom and messaging space: Smart telcos will, instead, move to acquire the social messaging platforms themselves. Telcos will compete for app marketshare, making additional revenue by selling valued added services. They may, for example, turn their apps into ecommerce platforms, allowing companies and users to collect and receive micro-money transfers. Demand for mobile money transfer services is high in the emerging markets because of the lack of existing infrastructure. This shift may also pave the way for the Internet giants, like Google and Facebook, to transition into fully-fledged telecommunications companies themselves. This trend is one reason why New Call recently acquired Nimbuzz, a fast-growing Indian mobile technology brand with more than 210m users across the globe. It's one of the most popular messaging apps in India and MENA. It is a central plank in our strategy to build an ecosystem of mutually-supportive apps that can be commercialised through elective add-on services. We have already launched, Holaa! our new breed call management platform, and will continue to launch more innovative apps in the New Year.
Nigel Eastwood
I believe that in 2015 we'll see the first signs of a huge telecoms revolution, one which will be powered and driven by the developing world. Their customers are demanding new applications and functionality; new affordable solutions and new platforms that power their digital lives. And if we want to be part of it, we'd better listen to them!
