Wholesale Voice: a strategic roadmap for Wholesale Carriers
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WHOLESALE VOICE A Strategic Roadmap For Wholesale Carriers Published January 2004 40pp and Database |
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Synopsis
As the first, and most important strategic assessment to be conducted about the future of wholesale voice, this new report sets out a recommended road map for market players in a market it assesses as valued at USD 9 billion by the end of 2002.
Documenting the decline in the value of the average voice minute by some 85% between 1996 and 2002, the report forcefully argues that the wholesale market is polarising, and has now reached a tipping point significantly surpassing key changes in the mid-90s, to the ITU regulated Correspondent Trading System.
Although wholesale volumes have increased substantially over the past five years, margins in liberalised markets have conversely declined, the implications of which are profound for all players including telcos, aggregators, pure play wholesalers and single route operators.
Structural changes in the market, particularly in terms of the need by telcos to minimise the number of interconnect agreements have resulted in re-entry by aggregators, and in turn impacted termination rates. Compounding this effect, continued liberalisation of traditionally high value countries and regions (India, Sri Lanka, Malta, Eastern Europe) is reducing termination prices and reducing margins.
The US, which remains in heavy deficit on the telecoms current account continues to press aggressively for the reduction of termination rates in all destinations through institutions such as the FCC, World Bank, WTO and ITU-(T).
Collectively, the report suggests these environmental changes demand new strategies and that decisions and actions taken now by principal players in wholesale voice - the telcos - will impact the entire market. Price commoditisation now exists across all layers of the value chain, from retail to infrastructure, due to the level and durability of competition.
The report warns that VoIP players in particular will need to ensure they are strategically well placed to sustain their "out-reach" businesses in non-home markets or face market exit.
Financial models of wholesale voice services are analysed in forensic detail, and demonstrates that the competitive wholesale business of the major telcos, in its current form, is creating a negative drag on the retail IDD cost base.
In proposing business models that can deliver improved margin, the report calls for a re-evaluation and reform of the entire system, and argues that the wholesale voice market is now entering a new period of collaboration that must deliver the lowest cost base for retail IDD and improve the absolute profitability of the international wholesale business.
For players in the market, and observers in the financial sector, the report provides a clear guide to current market segmentation and evolutionary changes that have occurred in the market construct.
Identifying key players, it carefully explains the inter-relationships that exist within international wholesale, refile and hubbing services. These operators interconnect to the major international commercial and infrastructure operators and manage a number of the financial risks associated with the market.
Key Benefits Of The Report And The International Wholesale Voice Database
- First ever unique and robust strategic evaluation of the wholesale voice market globally
- Opportune and timely roadmap for all players in the wholesale voice market
- Unique financial analyses of carrier wholesale voice businesses based on actual case studies
- All analyses are supported by 30 Tables and Charts
- Unique international wholesale voice forecasting database providing a wealth of data
Who Should Buy The Report
- Voice and Data Carriers
- Aggregators
- Single Route Operators
- VoIP Players
- Regulatory Organisations
- Law Firms
- Supplier Companies
- Consultancies
- Financial and Investment Services Organisations
Contents
Executive Summary
1. Wholesale Voice Markets
1.1 International Wholesale Market
1.2 Changing Environmental Factors
1.3 Market Size & Valuation
2. Financial Performance of Wholesale Voice Carriers
2.1 Operator Financial Segmentation
2.2 Major Telcos
2.3 Aggregators
2.4 Single Route Operators
2.5 Conclusions
3. The Future Development of Voice Wholesale
3.1 Introduction
3.2 Consolidation
3.3 Liberalised Markets
3.4 Non-Liberalised Markets
3.5 Conclusions
4. International Voice Forecasting Model
4.1 Introduction
5. Glossary
Tables and Charts
| Figure E1 | International Wholesale Operator Segmentation |
| Figure E2 | Consortia organisation construct |
| Figure E3 | The next step |
| Figure 1.1 | International Wholesale Market Segmentation |
| Figure 1.2 | Propensity to Outsource |
| Figure 1.3 | Wholesale Market evolution |
| Figure 1.4 | International Wholesale Voice Value Chain |
| Figure 1.5 | Market evolution |
| Figure 1.6 | Global Voice Traffic Forecast for Public Networks |
| Figure 1.7 | MiTT USA and EU15 compared to World Traffic |
| Figure 1.8 | USA and EU 15 as % of World Traffic |
| Figure 1.9 | Expected Outturn in 2002 of World Voice Traffic Flows |
| Figure 2.1 | Operator Financial Models |
| Figure 3.1 | The Evolution of Wholesale IDD |
| Figure 3.2 | Consolidation in the Liberalised Markets |
| Figure 4.1 | Traffic Forecasting Model Structure |
| Table E1 | International Wholesale Margins |
| Table E2 | Changing Rates for Termination in India |
| Table E3 | Market Termination Rates - Liberalised Markets |
| Table E4 | Re-cast financial performance for the liberalised wholesale business |
| Table 1.1 | Wholesale Voice Market Valuation |
| Table 2.1 | Major European Telco - Competitive International Wholesale Financial Performance |
| Table 2.2 | Major US Telco - Competitive International wholesale - Financial Performance |
| Table 2.3 | European Aggregator - Financial Performance |
| Table 2.4 | SRO - Financial Performance |
| Table 3.1 | IDD market Shares in the UK (Source: Oftel) |
| Table 3.2 | Consolidated Financials |
| Table 4.1 | |
| Table 4.2 | Average price per MiTT into a Region |
| Table 4.3 | Value of the International Wholesale Business |
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