Gartner top analyst Will Hahn told carriers to either restructure, or simply stagnate and be happy playing the role of a utility provider.

Hahn, speaking to a crowd at the Gartner Symposium 2008 in Cape Town, stated Voice-over-Internet (VOIP) and mobile networks are killing off traditional fixed line services. The regular fixed line market started shrinking in 2005 and Gartner believes the world market for fixed services will start contracting from 2009 onwards.

To add to the dilemma, Hahn notted that 'fixed data does not grow as a proportion of the total and neither does mobile voice. So three of four elements in the legacy telecoms services pie are static or shrinking.'

The ratio of equipment expenditure to services revenue dropped to historic low from four to one to three to one during the dotcom bust of 2007, meaning carriers had revenue of three dollars per dollar spent on network equipment. Hahn stated he expects this ratio to become bog-standard by 2012 as the revenue mix changes into converged video and content services. The odd carrier may implode if they are unable to come up with a witty plan.

Hahn warned that carriers will also suffer from mobile data flat-rates and an open mobile internet. All sorts of companies will start coming up with strategies how to benefit from mobile services, totally independent of mobile carriers. Competition from broadcasters, media and entertainment will start hitting the mobile market, whilst regulators will carry on breaking up bottlenecks and levelling the playing field. Hahn referred to the European Commission capping prices for mobile roaming as a prime example.

Carriers in the Asia Pacific passed Western Europe last year on terms of spending on equipment and are expected to pass the US in 2008. Africa and the Middle East will however remain the fastest growing regions, but nonetheless those two regions will remain smaller than Latin America in total.  

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