Looking at Telecom industry trends by 2020 and beyond
For last 20 years, continuous technical transformation and information waves have driven high growth in the telecom industry. However, an age with saturated telecom penetration is coming, and industry is facing a brand new situation. Top 5 disruptions that will drive the most change in telecommunications by 2020 are:
- Integration with content service providers: Being connected continues to become cheaper. Connectivity is capturing a smaller proportion of the information value chain while content, service, and product deliverers capture more. By 2020, it is likely that one or more major telecom companies will be acquired by a content company.
- IoT: The next major trend that will impact is the explosion of connected devices. This will add billions of new connected data sources globally by 2020. The upswing of all of these devices will be an astronomical growth in data volumes; we will quickly push through exabyte volumes and enter the world of zettabytes per year.
- Mobility: Growth of mobile connectivity is far outpacing fixed line connectivity. This makes sense, as most growth is occurring in the developing world and amongst poorer populations. For these people, mobile is cheaper, convenient, and more useful, even when landline connectivity is an option.
- Market Saturation: Elder population as they retire will enter retirement communities and assisted living facilities which are fully digitized in order to be as efficient as possible. Older population will be forced into using these technologies by the world around them and will likely consume vastly more bandwidth than they, or their carriers, ever imagined. As this occurs, the last remaining percentages of market penetration will be achieved, and the market will be thoroughly saturated.
- Security: As custodians of the networks, carriers play a pivotal role in fighting the new threats that are emerging. Customers will begin to expect, then demand, more proactive protection from the entire internet value chain, and carriers will be expected to support these expectations with a range of technical and operational innovations. The desire for greater security may be a boon for carriers, if they embrace the need.
Looking at these trends how can the telecom industry adapt itself to the requirements of the new age in the changed environment? Telcos can continue to achieve high growth through following initiatives:
Surpassing population and developing new subscribers: The Internet of Things opens a door to new opportunities. Today, we are faced with many common problems. For example, energy shortages coexist with massive wastes of energy. According to research from United States Department of Energy, electrical energy loss accounts for 67% of the total electrical energy produced. The “Internet of Things” describes an unprecedented blueprint for industries such as telecom and IT. It is predicted that by 2020, the ratio between machine type communications to human type communications will reach 30:1, which will allow operators to extend their subscriber base from 6 billion people to 50 billion or even over a trillion machines and objects, and thus opens a new door and serves as the basis for “surpass population and developing new subscribers” for the telecom industry.
Surpassing voice communications and developing new services: Mobile broadband contributes to the industry’s rapid development. The revenue for voice services has saturated or even gradually declined with the developments of mobile communication in the past decade however at the same time, mobile broadband is entering a golden age of development, bringing human society to a new height of ubiquity. Currently, an open ecological environment that includes “terminal, network, and service” which centered on broadband experience is in an early form. With the challenges of traffic and cost being overcome, it is predictable that mobile broadband will become the most significant force to promote industry development. Operators can achieve sustainable growth if they focus on developing mobile broadband services rather than voice communications.
Surpassing the pipeline, and exploring new business model: Cloud computing brings new opportunities. The popularity of broadband provides a basis for cloud computing. Cloud computing appears in the form of an “information power plant”, and is overturning the traditional business mode of software, hardware, and media. That is, users are moving from “buying products” to “buying services”. Cloud computing will be the key for business development for operators, to realize “extending network value by surpassing the pipeline”.
Surpassing telecom and extending to other industries: The revolutionary experience of home networking creates new markets. Home networking is the major battlefield for “network convergence of telecom, TV and the Internet”. The “bi-direction and high bandwidth” features of the telecom network have an advantage in network convergence, and provide unprecedented strategic opportunities for operators to surpass telecom, and enter into new industries.
Inline with these trends, Communication Service Providers are being stimulated to transform themselves into a platform of opportunities harnessing the five digital forces— Mobility & Pervasive Computing, Big Data and Analytics, Social Media, Cloud Computing, Artificial Intelligence and Robotics to realign their business processes, products, and services. The digital transformation is helping the CSPs mitigate the challenges of shrinking product lifecycles, customer engagement and high churn rates.
Leading IT service providers in the market have built their Telecom service portfolios strongly around:
- Industrialized delivery factories with great emphasis on business acumen
- Fit for purpose platforms and solutions – pre integrated OSS/BSS/Enterprise applications
- Digital Customer Experience transformations
- Business simplification across the products, process & systems landscape
- Strong alliance and go to market partnership with leading Telco product vendors(Amdocs, Ericsson, Oracle, Netcracker to name a few leading product vendors)
Capgemini has shown great potential in aligning its service portfolios with respect to market dynamics:
- In 2014, Capgemini launched DCX, bringing together all capabilities related to Customer Experience as a top-line corporate initiative. As per Gartner’s 2014 Magic Quadrant for CRM Services, Capgemini is the 4th largest CX & CRM implementation provider worldwide. As all Telcos are undergoing huge transformation in Customer Experience Platforms(Channels, CRM, eCommerce & Mobility Solutions etc), DCX initiative brings vast opportunities to Capgemini
- Since 2011, Capgemini included Business Information Management solutions (“Insights & data” offering) under top-line corporate initiative to meet emerging market needs of Big Data & Analytics for today and future.
- “Communications Transformation Platform” is Capgemini’s proprietary solution for pre-integrated OSS/BSS/Enterprise applications product suit.
- Capgemini’s investment in Cloud Computing & Smart metering of utility services (M2M Enabler).
While Capgemini is primarily a technology based organization catering to various sectors, there is a need to invest in domain based competency development at offshore regions like India where the work force is now around 59000. This shift can bring significant difference to the way we approach business and service delivery.