Telekom Austria rejects opportunity in wholesale cloud

Telekom Austria rejects opportunity in wholesale cloud

Telekom Austria Group has confirmed to Capacity it does not see enough revenue opportunity to invest in wholesale cloud.

The carrier’s surprising strategy will separate it from larger European rivals Telefónica and Deutsche Telekom which have invested heavily in the cloud space.

Market competition has been one of the main reasons behind Telekom Austria’s decision, with so many carriers already fighting for cloud customers. The company said the cost to implement and develop such a product simply could not be justified, considering the projected returns.

Stefan Amon, head of wholesale at Telekom Austria Group, said that while it did make sense for larger carriers with economies of scale, like Deutsche Telekom, to develop their own products, the same was not true of smaller wholesale providers.

“We discussed it very hard from a Telekom Austria Group point of view and for wholesale, a cloud offering doesn’t make sense,” he said. “I think there is such a small space to offer cloud services that you could not justify the product development cost.” Analysts have often questioned the scope for return on investment through the service.

Instead of wholesale cloud services, Telekom Austria has chosen to focus upon an anti-fraud solution and installed SIM box detection in its markets, in addition to developing software to analyse traffic routes. The anti-fraud product is expected to launch by the beginning of September.

On the retail side, Telekom Austria is still committed to the cloud and launched a service for SMEs in its domestic market last year.

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