tag:blogger.com,1999:blog-17500930.post3362039523591148791..comments2024-03-20T22:57:03.923+00:00Comments on Dean Bubley's Disruptive Wireless: Is mobile voice revenue being hugely overstated? And if so, what does that imply for VoLTE?Dean Bubleyhttp://www.blogger.com/profile/05719150957239368264noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-17500930.post-91237443803997882872011-06-22T22:48:17.008+01:002011-06-22T22:48:17.008+01:00Great post, Dean.
By the way, O2 Germany has alr...Great post, Dean. <br /><br />By the way, O2 Germany has already changed the way it reports its revenues to reflect the fact that it has now fully separated handset and service charges with the introduction of its "MyHandy" hire purchase scheme for handsets. All O2 devices are now sold on the basis of a 12 or 24-month lease with monthly instalments/repayments and the option of a final payment to complete the purchase at the end of the repayment plans. The revenues associated from these HP plans are considered completely separate from the monthly service revenues generated from voice, SMS and data etc. Very interesting. <br /><br />Also, check out this fantastic quote from Colao on an earlier Vodafone conference call from Feb 2011. I find it fascinating and it confirms my view that operators will also soon have to stop the nonsense that is the arbitrary allocation of revenues between different services (voice, SMS, data). My experience in chatting to operators that if you ask 50 people how they disaggregate revenue from a bundled tariff that includes a variety of services, you will get 51 different answers, i.e. there is no consistency at all either across operator groups or even within the same groups and across their subsidiaries. <br /><br />See Page 18: http://www.vodafone.com/content/dam/vodafone/investors/financial_results_feeds/ims_quarter_31december2010/ims_31december2010_transcript.pdf <br /><br />Vittorio Colao, Vodafone CEO: <br />"The reality is that not only it will be very difficult to separate data from voice and SMS, at some point it will become meaningless to separate it, because customers get bundles, the separation is an allocation that we do based on certain accounting criteria, but at the end of the day it does not reflect any customer thinking and I<br />tend to believe that accounts should reflect reality and not vice versa. The reality is that<br />over time – and maybe, Andy, you can be more specific – we will – probably the whole industry will move into something like bundled revenues and non-bundled or metered<br />revenues, something like that. We are getting equipped internally to look at things this way, because at the end of the day if a customer gives you £40 or €35 or whatever, it’s an amount, so it’s more ARPU management and yield management rather than really a specific line item."T Wehmeiernoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-75205650842013277452011-06-22T21:40:33.791+01:002011-06-22T21:40:33.791+01:00The accounting angle is interesting .. but perhap...The accounting angle is interesting .. but perhaps a bit inconsequential in its own right.<br /><br />With LTE and new regulation (net neutraility, MTA, Roaming) in conjunction with the accouncy regulations operators will be forced to seperate internally costs for services. <br />I am speculating here, but I wouldn't be surprised if Mobile Operators will face some 'ULL' aspects and LRIC-based cost allocation; which would mean cost-based acounting and perhaps even seperated lines (of the monthly bill) for each of the service including the 'managed services' like Voice an SMS.Colinhttps://www.blogger.com/profile/02738378252256424525noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-91765114888993013552011-06-22T16:03:13.697+01:002011-06-22T16:03:13.697+01:00I don't think service revenue is defined in IF...I don't think service revenue is defined in IFRS anyway. Nor is EBITDA. So the operators will probably publish two sets of accounts: one under IFRS and one which is more like their own management accounts.<br />I take your point about voice revenues, but it sort of doesn't matter in the long run as total revenues are what matters, especially as unit cash opex (eg termination fees) will drop and people buy more and more from bundles.<br />Anyway, the extant allocation of revenues to services is a bit flaky in some cases.<br />Most operators care about customer revenue / value much more than revenue by service line.<br />Then the only approximating / estimating they are doing is on allocating network costs to usage.John Daviesnoreply@blogger.com