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For Starhub, M1 and Singtel Investors–Telecoms likely to lose 50% of ARPU

For the telecom investors, GigaOM provided another good read that re-enforces how 3G, LTE and smartphones are bad business generally

Do read the full article here.

Skype and VOIP usage is huge. Facebook Chat, Whatsapp is also big. These 2 are starting to cannibalize the traditional voice and text plans.

LTE networks will eventually move their voice calling over to IP calls, it is unclear if the price paid for voice plans will see a subsequent drop. But data plans will only represent almost 40 percent of the average revenue per user (ARPU) by the end of the first quarter this year, according to Chetan Sharma, an industry consultant. This is a problem for two reasons, the first being that if people stop buying voice or texting plans, operators have a large hole to fill in ARPU. Second, the per-gigabyte price of VoIP calls or IM would not fill that hole but would also replace a higher-margin service with a lower-margin one.

For carriers, the worst thing that could happen from a pricing perspective is that consumers begin dumping voice and texting plans and acclimatizing to paying them less overall. But if operators cooperate with VoIP, IM and even video-calling services to offer an easier on-ramp to IP communications as well as plans that shift more of the costs paid by a consumer over to data, they may win. Companies like AT&T might be able to keep the same amount of consumer wallet share, co-opt their competition and probably eke out a few quarters of higher margins.


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