The global telecoms industry is going through a period of transformation. New technologies are disrupting the traditional players, and new competition is emerging. To a large extent, telecoms operators have not yet been able to find ways to monetize the data deluge flooding their networks and have struggled to reinvest in network upgrades as a result. On the other hand, many carriers have focused on broadening their service provision, becoming all things to all people in a bid to take a greater slice of the market.
The ways in which customers are consuming content is changing too. They want on-demand digital content streamed directly to their devices and are increasingly using messaging services such as WhatsApp, Viber and Apple’s iMessage to communicate with their peers.
This transformative era is affecting how the world’s major communications service providers (CSPs) and mobile operators respond to their customer needs and offer new types of services. Looking ahead therefore, what do the next 12 months have in store? Here are the six trends I expect to disrupt the global market.
IoT and M2M take center stage
Countless new devices are being developed and brought to market to support the connected society. The average family of four now owns 24 connected devices in total, compared to just eight devices in 2012. This is according to recent research from GSMA, which also reveals this figure is set to rise to 50 devices by 2022. These devices are set to support developments in connectivity across different areas of everyday life – from connected homes and healthcare, to autonomous cars and smart utilities.
Specifically, there will be growth in NB-IoT – a new technology standard using existing LTE network infrastructure to deliver improved coverage and more reliable and smart connectivity for IoT devices. Something else to look out for is the discussion on how 5G will enable IoT.
5G and FMC march on
Carriers in South Korea, China and the US are among the most active in testing 5G technology and these trials are set to continue into the new year. Operators will start preparing for the first 5G license auctions, which are expected in 2018; and FMC (fixed-mobile convergence) will become ever more prevalent. FMC is a powerful tool to capture mobile customers from competitors. Early results show that converged customers have a churn rate up to 50% lower compared to non-converged customers. This year, efforts will also be made to strengthen mobile backhaul in preparation for 5G bandwidths and speeds.
AI gets personalized
While interest in AI in the wider tech industry is nothing new, mobile is one of the most promising and exciting areas of investment in the technology. Coupled with data and network analytics, this will drive a new generation of ‘smart apps’ and ‘bots’, in turn, giving rise to new services and products that focus on drawing proactive insights from customer behavior. We’ve already seen some examples of this play out in the market, with Taco Bell’s ‘TacoBot’ providing users with recommendations on menu suggestions by predicting specific purchasing trends.
Cloudification on the rise
This year, we’ll also see a move towards public and private cloud services such as Network-as-a-Service (NaaS) and cloud RAN (C-RAN). Security however, will remain a concern for the big players who have a pivotal role to play in protecting their networks from new threats. Customers are demanding tighter security over their data, and carriers will be expected to deliver on these demands with a range of technical and operation solutions.
SDN and NFV will play a greater role
Over the next 12 months, there will be a stronger focus on software-defined wide area networks (SD-WAN), whereby physical WANs are virtualized and migrated to data centers. The big players will partner with start-ups (as we’ve already seen with the likes of Verizon and Viptela), and there will be greater interest from CSPs and mobile operators in areas such as network virtualization.
The growth of G.fast and DOCSIS
Another hot trend to watch out for is the advancement of G.fast, a standard that transmits data at 500 Mbps over copper within 250 meters of a distribution point. Other related fixed copper and cable network technologies, like DOCSIS, are also set to grow this year.
The telecoms industry is going through a period of great uncertainty as new technologies threaten to upturn the market as we know it. Organizations that invest in much-needed modernization and new strategic business models this year will be those that ultimately succeed in this state of fragility.