2016 Predictions for the Telecom World – Digital Transformation Leads the Way
By : Flytxt
The telecom industry will continue to face some real challenges of eroding revenues, increasing traffic, and higher costs. 2016 promises to bring some new factors in the market dynamics to enable Telcos to deal with these challenges and equip them with advanced solutions, frameworks and methodologies to embrace new opportunities in the fast-emerging connected digital world.
- Regulatory pressure will continue and intensify even further – As regulatory bodies across the globe rethink their approaches to regulate telcos in the connected digital world they will continue to take precautionary and restrictive measures in the name of security, anti-monopoly and consumer privacy. Regulatory roadmaps will include the measures to restore and prioritise trust and confidence for all stakeholders in the value ecosystem. 2016 will be the year where data-privacy and net-neutrality debates will intensify even further. We will see Telcos take the leadership in driving transparency and managing customer expectations on multiple fronts such as privacy, convenience, and personalisation, simultaneously.
- Next wave of consolidation among Network Equipment Providers will drive M&A -NEPs are witnessing significant consolidation, a trend we expect to continue, even accelerate in 2016. As common IT standards become the norm, consolidation and convergence are sweeping the industry, blurring the lines between the telecom, media, and entertainment players. These converged service providers will gain more control of the value chain and they will need to offer consumer-friendly services at cost-effective rates. This will put more pressure on equipment prices resulting in continued consolidation through M&A in the NEP market.
- New entrants, especially the Chinese manufacturers, will gain ground, quickly – As more and more handset manufacturers look to cross-over the traditional borders, the game of thrones will witness more challengers and new kings. Market saturation at home is pushing Chinese smartphone makers to seek new growth abroad. These Chinese players like Xiaomi will actively pursue innovative and aggressive strategies for world domination like extremely flashy product lines at affordable prices.
- Carrier-grade WiFi and standardization adoption will lead the way – Increasing demand from customers on consistent experience anytime, anywhere is intensifying the burden on licensed spectrum bandwidth. As new Wi-Fi standards emerge Telcos will have enough motivation to adopt these standards and implement carrier Wi-Fi offloading approach to supplement the existing spectrum, to provide stable “cellular-like” experiences to consumers. 2016 will see Telcos increase capacity in a cost-effective way and enhance customer experience through ubiquitous Wi-Fi and hotspots. I would not be surprised if we see emergence of Wi-Fi only operator using VO- Wi-Fi.
- OTT-Operators partnerships will flourish – OTT players and telecom operators have largely remained on a collision-course since the emergence of the former. 2016 promises to be an inflection point in the relationship of OTT players and Telcos. Telcos would look for collaboration opportunities with OTTs to offer new services to consumers through mobile money, storage, mobile advertising, etc. The challenge will be to design business models and associated use-cases for insight monetisation that will create win-win outcomes for both the partners.
- 5G adoption will hinge-upon several technological breakthroughs – The advent of 5G networks will strengthen the upcoming wave of connected digital world. 5G is expected to enable new use cases on enhanced mobile broadband, the Internet of Things (IoT) and unified and reliable communications. However, Telcos need to keep an eye on the technology expectation of 5G, such as IOT Support, Self-organizing Network (SON), Multiple-input Multiple-output (MIMO), Quality of Service (QoS) and spectral efficiency to support more than thousand-fold capacity increase that will accompany 5G adoption in the Telecom industry.
- SDN adoption should catch-up NFV rollouts – Telecom industry will see accelerated adoption rates of virtualisation technology. 2015 saw initial commercial NFV roll-outs from several telcos through the virtualisation of LTE network. In 2016, Telcos are expected to lead the SDN adoption drive. SDN’s control together with NFV’s flexibility will enable the Telcos to develop new business models, reduce network complexity, increase levels of service flexibility and reduce operational costs.
- Vo-LTE, Vo-WiFi will enable Telcos to rollout rich communication services (RCS) – 2016 promises to be the year when the transformation of voice transmission through VO-LTE and VO-WiFi will enable the emergence of rich communication services (RCS) like video calling, video messaging, conferencing etc., as network services rather than as apps. This will equip the telcos with much needed ammunitions to compete with the OTTs. This will also allow the Telcos to regain the control on customer relationship through better coverage at first, opening doors towards better network monetization via non-commoditized, advanced services in future.
- Leap from Business as Usual to Business as Digital – In 2016, Telcos will focus on ‘digital initiatives’ by bringing a modern digital experience to customers through mobile consumer analytics. Telcos will prioritise the transition from Telco services to digital Services provider to media owner. Non-traditional revenue streams through comprehensive data monetisation would be the imperatives for the telco world in 2016, to deal with the margin pressure and declining traditional revenue streams. The digital transformation will enable the telcos to offer differentiated and delightful experiences to consumers as well as harness the extended ecosystem including IOT and M2M trends.
- Telcos as IOT Service Provider – IoT consumer demand has really started to take off in 2015, and is expected to accelerate even further in 2016. We believe that 2016 will be the year when Telcos, especially in the most advanced telecom markets, are expected to emerge as the key catalyst in the rapidly evolving Internet of Things (IoT) ecosystem. Telcos with an inherent advantage with their connectivity layer, will look to advance the application layer in order to gain flexibility and agility required to become a multi-service provider in other vertical markets in the IoT ecosystem.
2016 promises to be the year when most of the industry-altering trends will gain further momentum and telcos would gain prominence as new ecosystems flourish. The emerging multi-sided business models, technological advancement and innovative mobile consumer analytics are creating the sweet-spot for telcos to transform into a digital service provider and enable connected living. Big data analytics platform with open APIs to deliver packaged insights, within an ecosystem without the risk of running into regulatory, security or privacy issues, will propel the operators from being bystanders, to a true enabler of multi-industry convergence.
This article was originally published in Total Tele Magazine