Consolidate! – The headlines every second day during ­these times of economic turmoil is replete with breaking news of ­government takeovers, downsizing and cost cutting. Gone is the era of largesse, of multibillion dollar acquisitions, leveraged buyouts and rapid expansion. This is not the first time in history, nor will it be the last. From ancient times, the expansion of every empire has been followed by a period of maturity – where priorities shifted to consolidate assets in an attempt to extract the maximum from available resources.

The telecom sector has not been completely immune to the current crises with companies cutting back on ambitious plans, replacing aggressive targets with more conservative figures. The question now is of real survival; the companies locked in a Darwinian struggle which will determine their existence amidst of declining subscriber spending, sluggish growth, increased competition and lack of easy financing. The immediate fallout has been a top down assessment of the different revenue streams and cost components. One of the revenue streams being assessed is the digital media services sector along with its associated production costs, where operators based on the respective technology availability have often built up a fragmented landscape of different solutions and platforms. Here, the consolidation approach of doing more with less seeks to maximize the investment for the operator, especially in these financially challenging times.   

From expansion to contraction – and consolidation   

In the past decade faced with slowing subscriber growth ­there had been a concerted attempt by operators to diversify into new market segments. One of the prime targets was media with operators entering the market through IPTV, music streaming, mobile TV and allied services. This had traditionally been the turf of the cable companies, with healthy margins and a strong growth potential. Different vendors began to offer carrier grade telecom solutions, each service segment typically built up as a silo offering. The end result has been several independent services with little or no interaction with each other.