Technology advances are increasing the bandwidth available to wireless communication services, making traditional telecoms providers, such as Telstra, increasingly vulnerable to competition, according to a new report from Deloitte.

Ian McCall, Consulting partner at Deloitte said, “The successful evolution of wireless technologies means that they now present a real alternative to wireline service provision. This is both in terms of the performance of these technologies (in particular their improved reliability, quality and bandwidth), as well as the additional benefits of mobility and flexibility. Internationally, such developments present a real opportunity for players in the wireless sector to encroach on market share held by more traditional landline providers.”

“Here in Australia, this dynamic has already increased the tempo and intensity of competition between the major telco players as the substitutability of wireless products for some landline services increases,” McCall said.

The Deloitte report identifies new ways for providers of wireless services to address competitive challenges and target new growth markets such as 3G voice services, Wi-Fi data, and pooled spectrum video. The innovations that have created these technologies have set the stage for disruption of the telco sector. The future that actually plays out will depend upon the commercialisation strategies chosen by specific players.

The report, “The Hundred Year Storm: Wireless Disruption in Telecommunications”, recommends that providers of wireless telecom services – whether voice, data or video – follow these strategies:

- Invest to meet the needs of mass-market local telephony users instead of continuing to focus on high-usage corporate customers;

- Start actively promoting and investing in wireless as a substitute for local telco voice; and

- Market to non-traditional consumers – who are generally the least demanding and least profitable.

By experimenting in carefully selected foothold markets, providers will be able to master new applications, essentially getting paid to develop and introduce improvements that will give them an advantage when moving into mainstream markets, according to the report.

Disruption will occur when wireless services begin to steal the growth in the telco market, as well as penetrate the established base of customers, the report predicts.

According to the report, strategically identifying and following a disruptive approach, both new and incumbent wireless service providers can effectively navigate the storm while achieving better and faster results and avoiding costly and potentially even disastrous mistakes.

Deloitte's McCall says, “Telecommunications is one of only a few industries that has escaped frequent disruption. The last time it happened was when voice telephony disrupted telegraphy services more than 100 years ago. As a result, no one alive in the industry today has experienced anything similar to disruptive threats incumbent providers now face.”