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$2 Trillion Telemedicine Market

7/10/2020
For large telephone carriers their future lies in telehealth and telemedicine 
 
NEWS Eastern Management Group Research Identifies $2 Trillion Telemedicine Market

New York, NY– While telemedicine is finding increased usage during the COVID-19 pandemic; the opportunity is considerably more substantial than anyone ever imagined.
 
New research from Eastern Management Group, and reported this week in HealthTechZone, finds the potential market for telemedicine may be close $2 trillion annually, not $50 billion, the totality of today’s worldwide spending. 
 
While large, $50 billion is not a remarkable opportunity for many potential telemedicine vendors, according to Eastern Management Group research analysts. Many providers are just taking a bite at the apple, while the most qualified may not bother. 
 
Global healthcare spending was $7.8 trillion in 2017, growing at 5.7% annually, according to the World Health Organization. That places the expenditure at $10.06 trillion in 2022 based on estimates. The Centers for Medicare and Medicaid Services projects US healthcare spending will be 20.1% of GDP by 2025.
 
If telemedicine, also known as connected health, would capture one-fifth of total global healthcare spending, as our models show, it would be a $2 trillion annual business.
 
The glitch is that telemedicine, despite its successes, accounts for 0.005 percent, just one-fiftieth of all healthcare spending. In other words, $50 billion not $2 trillion.  
 
Telemedicine performance operates far below the revenue opportunity.
 
Large tier-1 carriers should have the motivation and possess the opportunity and resources to bridge the gap.
 
AT&T and Verizon and are probably the best US candidates to go after the 2 trillion telemedicine market. Outside America, service providers like BT, Orange, and NTT are significant prospects.
 
The two principal businesses of the tier-1 carriers are wireline and wireless. Wireline, effectively landlines, is under revenue and earnings pressure and holds onto a precarious future. Wireless as it currently exists is an attractive though maturing business. 
 
While other revenue sources, including entertainment, programming, and TV subscription bundles, generate cash flow, the long-term contribution of these enterprises to the tier-1s is uncertain. Often, the new fields pursued by the carriers are mature, overcrowded, highly competitive, and not likely big winners for the telcos.
 
Carriers are at their finest when new businesses they pursue represent enormous emerging opportunities, lack substantial competition, and are waiting to be dominated. We see entertainment lacking each of these characteristics, while telemedicine exhibits them all.
 
Tier-1 carriers have some telemedicine revenue today. Every time a doctor and patient engage in a virtual office visit using FaceTime, Zoom, or doxy.me, carrier networks are used. The business is not all incidental, though. AT&T and Verizon have telemedicine webpages, while other tier-1s have telemedicine business partnerships. While attention-getting moves, none are game-changers or transformative as a $2 trillion business would be.
 
Telemedicine is a promising opportunity where the carriers start with a decisive competitive advantage.
 
The largest carriers have wireline and wireless networks - the centerpiece of telemedicine, global coverage, hundreds of thousands of employees, access to capital, customers, distribution, data centers, engineers, R&D, billing, and excellent legal and regulatory experience. All have trusted brands and an incentive to add a multi-trillion-dollar business opportunity to the portfolio. If that were not sufficient, large carriers are exceptionally well managed. 
 
Large service providers are likely to have more to offer telemedicine than any other class of company.
 
About: The Eastern Management Group is a global communications industry management consulting firm with offices in New York and offices in Tokyo. Over 40-years, the Eastern Management Group has advised eighty percent of the largest communications providers on new business issues. John Malone is CEO and a former AT&T executive. For more information, contact John Malone at 212-738-9402 Ext. 2201 or jmalone@easternmanagement.com or easternmanagement.com
 
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