mobile consulting ICT Telecoms and Software Expert Advice

    Advising on the commercial impact of technology and
    market changes in telecoms, software and IT services

mobile consulting
mobile consulting
technology advice European ICT
Register  
Sign in  
mobile consulting
mobile consulting
Home > Media > Telecoms and Software News
 TELECOMS AND SOFTWARE NEWS


Telefonica launches global e-health unit

Charlie Davies

Telefonica launches global e-health unit

As a growth vertical, e-health has great revenue prospects in both developed and developing markets, but the opportunity for telcos to profit from its dependence on telecoms networks remains unclear. Telefonica's recent launch of its strategy in e-health underlines that the real money lies in carving out a central role via partnerships in new product development and managed services developed with practitioners and sold into the healthcare sector. Telefonica is one of the few companies with the resources and global presence to do this; this kind of approach will remain the preserve of a select few.

E-health is increasingly central to tackling the looming healthcare challenge

The rationale behind Telefonica's focus on e-health as a vertical with significant growth potential is based on the widely acknowledged fact that healthcare spend is a ticking cost time bomb. An ageing population combined with a rise in chronic diseases is a challenge governments need to start addressing now, not in a decade. Utilizing telecoms and IT to develop new ways of reducing these costs and improving services is seen as a central plank of transforming (or more realistically, evolving) the way healthcare is delivered and managed (see our report A strong case for telehealth in Europe, available on the Ovum Industries and Technology Knowledge Center). Telehealth, along with other emerging communications-dependent services such as smart metering and e-education, is regularly highlighted as an important new revenue growth opportunity for telcos; France Telecom is another incumbent that has prioritized e-health as core to revenue growth during the next few years.

What's in it for telcos specifically? Connectivity-based revenues won't add up to much

The telehealth services we recently saw demonstrated at Telefonica's headquarters in Madrid stood out as being well-developed services with mass appeal to patients - clearly the fruits of a user-centric approach to design. The services are already being used by a number of hospitals and patients in Spain, the UK, and the Czech Republic. However, the extent to which the telco-dependent service piece - the connectivity via mobile or fixed line - can generate any significant premium remains unclear. For example, the telerehabilitation and telecare services require a reasonable low-end bandwidth broadband connection, not a high-speed link.

Significant e-health revenues will only be harvested by a select few

Telefonica's strategy reinforces the idea that the biggest revenue opportunities lie in telcos becoming more heavily involved in managed services and new telehealth product development, selling these into the healthcare vertical with partners. In Telefonica's words, it “aims to become a standard bearer in the areas of products, pilot projects, and know-how.” The focus in new product/service development is on using telecoms as a key functionality. Prior to the launch of its global e-health unit, Telefonica had laid down considerable groundwork focused around building relationships with the healthcare sector, developing partnerships with Intel and Cisco, and launching its own R&D center in Grenada in 2005. This is obviously not a route every telco can go down.

Strategic moves in e-health are part of a wider drive towards innovation-led growth

E-health is one of five areas (whittled down from a list of nearly 20) prioritized by Telefonica as core to new revenue growth. Its approach to e-health reflects a number of tactics common to its activities in developing these areas: leveraging powerful local presences in multiple markets, particularly Spanish-speaking ones, in order to develop strong partnerships for development and service implementation; a greater focus on end-user-centric design; and, overall, a more open approach to collaboration. Telefonica admits that in the past it has been too defensive and not open enough about working with others. However, the effort and investment required for Telefonica's global/local approach shows just how few telcos will be able to follow suit.




About:

This article is an extract taken from Ovum's Straight Talk service. This daily email bulletin provides our expert's views and opinions on important news and events in global IT and telecoms. If you have a comment or question regarding this article then please submit your details here:

 Email address:
 Suggestion:

If you would like to find out more about Straight Talk please contact StraightTalk@ovum.com

If you would like to find out more about Ovum services then please click here for details

Search
Contact Us
Expertise
© Datamonitor - Ovum is a Datamonitor company