The telecom industry is facing a broad range of business challenges. The industry has witnessed a sharp decline in revenue streams in core areas like voice and text messaging, along with severe competition over the last few years from over-the-top service providers.
The telecom industry is leveraging Mobile Edge Computing (MEC), IoT, and 5G to recover from the COVID-19 crisis and boldly position themselves for the future. The industry must be customer-centric, improve efficiency, and add high-value margins by moving from traditional services.
Agility is the key to the future of the telecom industry. It requires the telecom industry to look beyond connectivity and complexity and toward new growth opportunities offering end-to-end solutions for both enterprises and consumers.
The Scope of the Telecom Industry
The COVID-19 pandemic caused a rapid decline in revenue, primarily related to the market’s increased competition, changing businesses, customer needs, the effect of digital transformation, and the inability to adapt soon. Despite the decline, the market is expected to see growth.
In 2019, the global telecom market was valued at USD 1.74 Tn; in 2020, it was USD 2 Tn. It is expected to grow to USD 3.4 Tn by 2025 at a CAGR of 7.21%. Mobile continues to play a significant role, with increased mobile service subscriptions, currently at 67% of the global population (5.2 Bn).
Several elements are set to impact the future growth of the telecommunication industry. They will require Telcos to innovate their service offerings, change their business models, and move toward being more flexible, agile, and connected.
Some elements include 5G’s impact on high-speed connectivity, reliability, and bandwidth, which could grow the demand for value-added managed services. Additionally, IoT could enhance customer service and a need for end-to-end solutions.
These elements provide growth opportunities and are some of the biggest challenges that Telcos must navigate.
Analysis of the Future of the Telecom Industry
Digital transformation and technology are a significant opportunity for Telcos to expand their offerings and solutions to add value to retail and enterprise consumers.
Enterprises could use technology to differentiate themselves, reduce customer churn, and enhance productivity. Companies are leveraging new-age technologies to improve operational efficiency and take up new initiatives. The below infographic mentions the use cases and different initiatives by various players.
Draup’s analysis of the industry has presented a few trends impacting the telecom industry:
Transition to digital learning and remote working
With digital learning and remote ever-popular, the pandemic accelerated the move from learning and working in physical buildings to virtual environments. There is a need for secure connections and reliable data management services for digital learning and remote work to take place effectively.
The telecom industry will continue to navigate to make them happen. Other elements to consider when possibly expanding opportunities include providing the same level of access and connectivity to those in remote areas.
Emergence of FinTech
Innovations like digital payments, mobile money, and online wallets have become essential services. Telcos can connect with an estimated 1.7 billion unbanked customers, which promises immense growth potential, looking for financial inclusion and providing simple and convenient ways to make payments.
The COVID-19 pandemic demonstrates the utility value of FinTech solutions to enable payments to be made virtually online or via mobile phone. These FinTech trends will continue to impact the future of the telecom industry and will allow operators to expand their service offerings.
Telecom industry business metrics and data security
Data and analytics are at the center of business success and remain competitive in the market. Analytics provide insights into customer behaviors and patterns, thereby better understanding your customer.
It provides insights into ways to enhance customer interaction and satisfaction. It identifies opportunities for new offerings that address their needs aiming to reduce churn and increase retention and revenue.
Data security concerns enterprises and retail customers; they worry about identity theft, financial loss, and unauthorized use of their sensitive data. The telecom industry must address safety and secure data to drive new value-added services.
4. 5G promise and the expansion of IoT and AI/ML
5G will account for 20% of the global connections with telecom operators and carriers, raising investments to USD 1.1 Tn in mobile CAPEX between 2020 and 2025 to support the shift to 5G. What does it entail?
The faster connectivity, low latency, bandwidth enhancement, and speed pave the way for IoT and edge computing, enabling digitalization, automation, and remote monitoring and management of operations and business processes.
5G will let operators target enterprises with 5G-related applications built explicitly for specific industries. We are seeing traction with IoT with impact on different industry verticals like healthcare (telemedicine solutions), automobile (vehicle telematics), smart cities, and smart manufacturing (industrial automation).
The total operator-billed revenue from 5G-IoT connections could reach USD 8 Bn by 2024, which is over 1,400% over the next five years. This move towards IoT lets Telcos innovate their offerings and utilize 5G capabilities, including network slicing and multi-edge computing solutions, adding value to their customer base with end-to-end solutions.
Artificial intelligence is impacting customer service and experience. Telcos can process and analyze large volumes of big data and gain access to actionable insights to enhance customer experience and improve operations and profitability.
When AI technology is used for network optimization and automation, it will enable telecom operators to detect any problems or issues with the network. It will allow them to identify and fix the problem before it negatively affects customers.
AI will enable virtual assistants to connect, engage, and support customers, allowing operators to implement self-service platforms and solutions, cutting down the need for call centers and support resources in the future of the telecom industry.
Partnerships and diversified ecosystems
The future of the telecom industry entails partnerships, mergers, and acquisitions (M&A), sometimes with service providers outside of the non-telecom industry. Such valuable M&As and partnerships will enable the telecom industry to differentiate itself and build new and enhanced service offerings.
When they align with other network service providers, the telecom industry can create new business models to deliver value-added services and remain competitive. Telecom companies can collaborate with different industries to develop industry-specific service offerings that answer to the needs of that specific sector to create successful revenue streams.
Partnerships and collaborations enable stakeholders to create new and diversified ecosystems that advance the industry and create more profitable business opportunities.
Draup’s report comprises a comprehensive view of the telecom industry, key trends, business initiatives, the landscape and use cases, region-wise analysis involving key players and projects, and critical recommendations.
Draup is a sales intelligence platform that enables service providers, startups, and enterprises to learn prospects’ business intentions, key signals, and trends. The sales teams can use the insights to address pain points in their pitches and target enterprises with their solutions.