LAS VEGAS—Consumers may not be willing to pay for the premium services many telecom companies are banking on to grow their revenues, according to findings of two new studies from KPMG L.L.P.
One study found nearly 60 percent of telecom industry executives are looking to strong revenue growth rather than cost efficiencies to improve their companies’ financial performance during the next two years. Forty-four percent of executives polled for the study said they expect revenue growth of at least 15 percent by 2007, with more than half citing new products and services as the key factor that will drive revenue growth.
In a separate study of consumers, however, 37 percent of North American respondents said they would not pay a premium charge for converged services, and 20 percent indicated they would be willing to spend only 10 percent more for premium services.
“While holding the line on costs remains critical, executives expressed high levels of optimism going forward in terms of revenue growth,” said Carl Geppert, partner and industry leader for KPMG’s Americas Communications and Media Practice. “Growth, however, will not come easy, as convergence and intensifying competition are fueling a relentless decline of prices for voice, broadband, video and packaged services.”
Geppert recommends carriers develop new business models around converged services that aim to deepen relationships with customers rather than trying to squeeze more money out of them.
In addition, KPMG’s study found North American consumers are generally comfortable with their wireless devices and prefer to consume all types of media, except music, on their cell phone. Consumers ranked wireless Internet access as their favorite capability, followed by taking and sharing photos and e-mail. Those who were interested in mobile video capabilities indicated they preferred movie trailers and short movie clips followed by news clips and sports clips.
