Managing Director & Head, Asia ex Japan
Research J.P. Morgan Securities Singapore Pte Ltd
Telecom networks are not commoditized and therefore value is a function of price and quality, argues James Sullivan, J.P. Morgan head of Asia equity research (except for Japan).
So it is “value” that ultimately drives revenue, profits, usage, capex, and opex.
An inability to create such value could lead to vast reductions in the number of service providers able to operate their own networks across much of the developing world.
Those are among the several key themes Sullivan will address at the Spectrum Futures 2017 conference.
Consider the key matter of market share. “When overall industry revenue growth is stagnant, as it is with most telco markets, market share movements become the determining factor of an operator’s top-line performance,” says Sullivan.
But to take market share, it helps to have a network that supplies services perceived as having higher value, on quality dimensions, price dimensions or both. The issue is that “quality” is hard to quantify. But most consumers understand “faster or slower,” “more expensive or more affordable.” That is why 4G networks have proven to be a competitive weapon in many markets where most competitors offer only 3G services.
But value creation also means service providers have to boost capital investment to build the faster networks and then to handle the increased usage customers will generate. In that sense, value not only drives market share and revenue, but also usage and therefore costs.
Sullivan at Spectrum Futures will present a number of views about how value can be created and measured. Don’t miss out. Register now for Spectrum Futures.