Ovum analyst Charlie Davies has a worthwhile analysis of Spanish mobile operator, Telefonica's recently launched eHealth global business unit. The eHealth unit already has outposts in Spain, Europe and Latin America, and is currently involved in some 80 telemedicine projects in more than nine countries. Telefonica aims to decentralize clinical processes, create integrated service networks, and make these services accessible from anywhere. Here's Ovum's take:
Why did Telefonica choose to launch its eHealth business unit now?
"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 aging population combined with a rise in chronic diseases is a challenge governments need to start addressing now, not in a decade," Davies wrote. "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."
Nothing new here -- these are the typically referenced drivers of mobile and connected health services.
While it's clear that eHealth is an opportunity, the question is, for whom?
"As a growth vertical, eHealth 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," Davies wrote.
"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," Davies wrote. "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."
Cambridge Consultants Paul Williamson made similar comments at last year's Mobile Healthcare Industry Summit in London: Data volume for wireless health services is relatively low, Williamson noted. The corresponding increase in data revenue then would also be rather low. If the costs, burden and returns are low, carriers won’t be motivated to offer wireless health services because of the direct returns alone, Williamson argued.
Ovum: eHealth's biggest revenue opportunities for carriers
"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.'"
As Ovum notes, that implies few other carriers will have the resources to follow the Spanish operator's lead.
More from Telefonica's press release here (PDF)
