Posted on 2/08/2017 by Jay Banghar
The telecoms industry has seen tremendous advancements in recent years, it is still evolving, and yet at the same time is grappled by unexpected industry forces. These are some of the most challenging times for telco businesses around the globe and to ensure proper sustainability in the market now, telco operators will need to embrace change to deal with the challenging times ahead. One of the strongest drivers behind any industry or market is undoubtedly consumer behaviour and the telecoms industry is no exception.
2016 has no doubt been a significant and transformational year for the telecoms and networking world - but what opportunities and challenges is it going to experience from 2017 and beyond?
OTT at the top!
The competition has arrived. The proliferation of Over-the-top (OTT) players that offer apps and streaming content directly to consumers through the Internet, have increased their dominance, especially in core communication services such as messaging and voice. Whatsapp and Viber for instance, already represent more than 80% of all messaging traffic and Skype can easily account for more than a third of all international voice traffic minutes. In addition, the OTT service growth is also fuelled by video streaming like Netflix and public demand for more non-linear media consumption. With these new revenue streams, telcos face a major decrease in their basic communication service revenues such as SMS messaging and roaming.
5G is the next ‘king’
The race for 5G is on and will continue fast in 2017. Numerous telcos worldwide are already developing or have developed 5G architecture and have already initiated their field tests this year. Industry experts are predicting between 2018 and 2020 we will potentially see the very first wave of commercial offerings being launched amongst widespread trials of technology, and much of the progress toward 5G speed is well underway. 5G certainly presents a world of ‘limitless boundaries’ for telco carriers to a large extent as they explore the vast ways in which 5G can revolutionise their products and offerings. It is highly interesting to note that 5G can actually be optimised by telcos to offset the drawback coming from OTTs mentioned above. With the advent of 5G, telco businesses could possibly partner with and become primary OTT solution providers, in order to bolster revenues, compensate for downward price pressures and build customer loyalty.
IoT & Telco
Just one word is needed to sum up the biggest benefit to telco businesses with IoT: Opportunity. Research suggests that by 2020, there will be close to 28 billion devices connected to the Internet, and consequently, the rise of IoT will drive data consumption and accentuate the growing mobile data trend that is revolutionising the industry. As IoT changes consumers’ data consumption such as video-streaming on smartphones, and connectivity demands, it becomes more than ever essential for telecom companies to devise differentiated products and services that support and enhance the next-gen smart devices. With greater pressure on connectivity continuity, there inadvertently comes greater privacy and security concerns.
Statistics show that more than 50% consumers are concerned about data sharing and hacking. While telco providers wouldn’t have all the answers to the above yet, those that can give customers a peace of mind will have a major competitive advantage.
The bottom line is: Telcos cannot wait. The above discussed disruptions and opportunities are real and will ultimately change the core approaches of carriers. The ability to monetize in this fast-changing world will remain key to being successful to the masses.
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