Telco industry actually reaches a proper inflection point

Mobile and tablet Internet use overtakes desktop for the first time, and some companies are doing a better job than others at capturing the opportunity.

Sit in on any telecoms-related presentation and chances are, talk will turn to how the industry is at some sort of inflection point, or at a fork in the road, or at a turning point, or on the cusp or verge of a gravitational shift, or some sort of tsunami-sized wave is very close to breaking.

I’ve yet to see a presentation that combined every different way of saying more or less the same thing, but I’m starting to think that whoever is first to stand up and say that the industry is approaching the cusp of a gravitational inflection fork in the turning point on the road towards the verge of a breaking tsunami, will be declared the winner of telecoms, and we can all go home early.

Bonus points will be awarded for warning that industry players cannot afford to ignore the cusp of the gravitational inflection fork in the turning point on the road towards the verge of the breaking tsunami. Crowbar in a few “exponentials” or “explosives”, mention disruption a few times, and just wait for the novelty-sized cheques, with more zeros than you can shake a stick at, to start rolling in.

These inflection points and turning points also come round so regularly, and are frequently repeated, that it sometimes feels like the industry is going round in circles. In future, I predict that the Spirograph will be the most practical method of illustrating where telecoms has come from, and where it is going.

However, it came as a refreshing relief to my inflection-fatigue to see a genuine, bona fide shift in the industry this week, when StatCounter revealed that Internet use on mobile and tablet devices exceeded use on desktop devices worldwide for the first time in October.

According to the stat firm, mobile and tablet accounted for 51.3% to desktop’s 48.7%.

The change is coming from markets like China, Africa, and India, where the majority of people access the Internet for the first time on a mobile device.

According to StatCounter, 54.6% of Internet use in China is via mobile or tablet. That rises to 63.5% in Africa, and almost 79% in India. In Asia as a whole, mobile and tablet accounts for 64.3%.

By comparison, desktop is still the dominant method of accessing the Internet in mature markets. In North America and Europe, for example, desktop use accounts for 58.3% and 64.3% respectively.

Despite the regional discrepancies, mobile’s share is growing, and this week’s stats “should be a wake up call, especially for small businesses, sole traders and professionals to make sure that their Websites are mobile friendly,” said StatCounter CEO Aodhan Cullen.

One not-so-small business that’s making a decent go of mobile is Facebook.

The world’s largest social network this week that mobile monthly active users (MAUs) reached 1.66 billion at the end of September, an increase of 20% on last year. Mobile daily active users (DAUs) reached 1.09 billion, up 22% year-on-year. The number of Facebook MAUs who only access the service via mobile increased to 1.06 billion from 727 million a year earlier.

In the third quarter, mobile accounted for 84%, or $5.73 billion (€5.16 billion) of Facebook’s advertising revenue. That compares to 78% in Q3 2015.

Contrast Facebook’s meteoric rise with those of Yahoo, an Internet pioneer that either failed to see which way the wind was blowing, or, saw which way the wind was blowing but built a kite made out of lead.

Yahoo generated revenue of $396 million from mobile in the three months to 30 September, up from $271 million a year earlier. While that is an impressive growth rate, the figure itself is still paltry compared to Facebook, a company half the age of Yahoo.

Yahoo now finds itself selling its core business to U.S. telco Verizon, although it is somehow at risk of messing that up as well, after it emerged that it had failed to spot for two years that the personal information of 500 million users had been stolen.

Meanwhile, Google, which has historically struggled to make money from mobile search advertising, appears to be turning things round, reporting in its most recent financials that growth in aggregate paid clicks outpaced the decline in cost-per-click.

Even Microsoft, a company that has had more false starts in mobile than most, had reason to cheer this week, when stats released by Strategy Analytics on Monday showed that third quarter shipments of Windows tablets grew 25% year-on-year to 7.3 million, giving it a market share of 16%.

You just know the industry is on the cusp of a tsunami of inflection points when Microsoft starts doing something right in the mobile device market. Better dust off the Spirograph and get plotting…

Source: Total Tele

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