The internet ecosystem is changing all around us and within all industries and verticals. The impact on mobile network operators, government agencies, within education, enterprises and more is huge.
Henceforth it is clear that, Connectivity is at the heart of the digital
ecosystem; this means, policy and regulatory frameworks have to modernize to
reflect these new market dynamics brought about by the internet.
This new research provides a factual baseline that operators, policymakers
and stakeholders can use to assess the opportunities, competitive dynamics and
overall health of the internet ecosystem.
Key Findings
of the Changing Internet Value Chain for the Mobile Sector
The report presents an insightful view into the development of the internet over the
past five years. In particular, the study highlights key implications of these
changes for the mobile sector:
- The value created by the internet ecosystem is increasingly captured by online service providers. In 2015, online services captured nearly half of the revenues of the entire internet ecosystem (47 per cent, EUR 1.4 trillion).
- Although internet connectivity revenue is growing, the proportion of value captured by connectivity players is declining. Connectivity revenue grew from EUR 199 billion in 2008 to EUR 508 billion in 2015.
- For mobile network operators, connectivity revenues generated by increased internet use are not offsetting the decline in revenues from traditional communication services, and mobile data revenues are also forecast to grow at a lower rate than the growth of other segments.
- The internet ecosystem is maturing. Innovation and technical development still proceed at pace, but the largest players in any given segment deliver higher returns and profit margins. They have secured their leadership position and fewer new players are achieving scale. Eleven of the top 15 US websites visited by users in 2009, for example, were still among the top 15 in 2015.
Implications
for Policy and Corporate Strategy
Drawing on its findings about
the changing dynamics of the internet value chain, the report highlights key implications for corporate actors and
policymakers:
- Interdependencies between segments of the value chain are powerful and complex.
- The changed landscape requires a holistic policy framework. A holistic policy framework that recognises the changed competitive landscape, broader and multi-sided markets and dynamism of digital ecosystems is required.