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What is the future shape of telecommunications? (2016 Telco trends)

May 23, 2016

While various industries reflect progress and change to certain degrees and with different speeds of pervasion, the telecommunications industry stands right in the middle of all the new tech disruptions. What does this mean in terms of telco trends?

This environment is highly prone to innovations, and its specific or adjacent activities constitute a thriving medium for startups. Mobility has once again put telecommunications in the spotlight, since users are literally consuming connectivity on the go via their mobile terminals – and various changes mark this transformation that has to be answered by better devices, improved bandwidth and services, as well as a general upgrade in the Telco paradigm.

If we take a look at the teleco trends from a few years ago,

we might get an image of how expectations have progressed in relation with the necessities.

  • The Telecommunication Industry trends as they unraveled in 2014 envisaged the raise of Generation C – C from “communication” and “connectivity”, an exponential growth of the mobile devices, the increase of the cloud computing market size, new business models and many other possible or expected developments.

Another 2014 trends vision considered the acceleration of OTT through the vast amount  of users on Facebook, Skype, Twitter and other connectivity applications or platforms; with social networking leading the way in connectivity, followed by emails, SMS and Instant Messages, the global OTT players thrived and so did the communications service providers (CSPs). While the customers’ needs and demands moved fast, the classic telecom entities found it easy to lose terrain in front of new competitors and innovators.

  • In 2015 the specialists predicted the integration of major telecom companies with content service providers, the explosion of IoT connected devices, the growth of mobile connectivity, market saturation due to the older population retirement and their subsequent use of technology and bandwidth, as well as increased challenges in cyber-security (all by 2020).

A new business model in telecommunications

is the only viable solution to all these anticipated changes. Merging their services into a unitary form of “communications service providers”, the former telecom providers would have to harness the five digital forces, as Capgemini entitles them:

  • Mobility & Pervasive Computing;
  • Big Data and Analytics;
  • Social Media;
  • Cloud Computing;
  • Artificial Intelligence;

It is easily noticeable that some of the 2015 trends represent consequences of the previous trends. Similarly, the 2016 trends come as a crystallization of the major tendencies around the idea that telecommunications and content streaming merge into a new shape that has to withstand the public’s needs as well as the future IoT requirements – hardware and software included.

The 2016 telecommunications trends

seem to have sifted some of the previous tendencies away and focused on a few major goals, such as:

  • Telecom and IT services convergence/integration, using the cloud computing environment as a nodal point; voice calls, web access, video streaming and applications all come together in relaying information and data across networks; this is a previous stage to fully-developed IoT, where ubiquitous connectivity between various devices, cloud storage systems and fixed cyber – infrastructures would have to rely on powerful data-sharing and circulating networks; the classical system of providing Internet connectivity and bandwidth should evolve into an exponentially more resilient and faster structure, in view of which the researchers are searching viable solutions that would allow software and hardware efficiency;
  • The applications’ domination translating into increased and more demanding connectivity also puts pressure on the way Telco services manage to raise to the new challenges; when video conferences, unified communications, remote working, e-banking and other similar activities all rely on the quality of data transmissions, the standards are high and the failures unacceptable;
  • Mandatory cyber-protection, since cyber-security demands are amplified in an environment where inter-connectivity is the rule; all entry points need proper defenses;

Another article on Telco trends debuts by its author’s confession of having reviewed hundreds of future predictions for this industry, some of them extremely specialized, while it basically goes on by listing approximately the same main tendencies as above: integration, mobility/wireless, traffic boom caused by the IoT, saturation due to age groups’ dynamics and the elderly becoming tech consumers, and high cyber-security expectations.

The extra element here is that systems which would provide quality broadband access anywhere are expected to succeed and forever change the notion of Internet access (see Project Loon from Google, or Facebook’s drone Internet trials).

Another comprehensive study on 2016 trends in mobile telecommunications lists the following key findings:

  • Consolidation will continue in this field, translating into larger players acquiring smaller operators;
  • Responsiveness to customer needs will drive competition in the industry, with inherent transformations on the roll, to meet more sophisticated service delivery and data monetization strategies;
  • Telco virtualization would be a large-scale solution for network agglomeration due to increased traffic;
  • The best business model would differentiate competitors to a higher degree than offering the best hardware would, since the key is in perfectly combining various services to satisfy the customers’ needs and tailor an ultimate combo offer;
  • The smartphone prices will continue to remain increased and will hold back mobile broadband growth, especially in emerging markets;

These projected images are rather challenging for the Telecommunications industry, but let’s not forget that researchers are continuously striving to find better, cost-saving solutions to all the current and predictable changes, coming up with many innovations that are viable, and might considerably improve the related hardware and software.

While preparing for the most difficult scenarios, the Telco professionals also have reason to hope.