Trends and drivers
With the development of 5G technology well underway, and the growing presence of the Internet of Things (IoT), the data and telecoms landscape will soon change at a rate some will find alarming. Alarming, that is, to those businesses that aren’t able to flex and adapt. This paper will explore the technologies associated with the data-driven market, and the themes to consider in preparation for its ongoing expansion.
Over The Top (OTT) technologies (such as Snapchat, Facebook Messenger, WhatsApp and Skype) are mixing up how people communicate. There are big dents being made in the revenues created by traditional voice and SMS by OTT technologies, brought on by the availability of cheap mobile data plans from the Digital Service Providers (DSPs). And of course, many individuals are working further afield, away from family and head office, which means business and personal users are relying more on cheap OTT services as opposed to traditional voice and SMS.
An analysis of the coming trends of 5G and IoT shows operators that there is huge growth in data just around the corner, and there is scope to further capitalise on this by tapping into abundant new markets and monetising new services.
There’s no getting away from the figures; international voice minutes went down from 28 billion to 26 billion in the four years after 2012. Customers have researched new forms of communication and seen that they are cheaper and increasingly available to use.
With voice activated devices, Voice-over-IP (VoIP) will be used more and businesses will utilise cheap OTT communication apps like Skype to offer a low cost means of communication. If more big players come in and exploit VoIP, then the drop in international voice traffic may be even more marked than predicted. Considering this, it is not surprising that VoIP traffic is thought to have grown from 50 billion minutes to 61 billion minutes from 2016 through 2017.
Mirroring the growth in 5G, VoLTE (Voice over Long-Term Evolution) is expected to further grow in 2018, enabling more service providers to transition to all-IP networks.
Look out also for fewer, larger players on the near-horizon, as business acquisitions increase, allowing telecoms players to pool resources and share expertise.
Business Intelligence (BI)
LTE roaming has enabled growth in operator data revenues, but it has also driven a growth in competitor OTT services. Many operators have created new plans, services and tariffs, but there will be no return on these investments until they also invest in Business Intelligence (BI) solutions. It’s these BI solutions which will provide the insight needed into how services are used, and how effective they are. By finding hidden growth potential like understanding customer usage habits and being able to target subscribers with real-time targeted offers, operators will be able to keep up with the OTT service providers. Most importantly, perhaps, operators will be able to utilise BI insights to help unmute their silent roamers.
Internet of Things
To make the most of IoT opportunities, businesses will have to analyse data from a huge number of devices, sensors, geographies and the cloud. BI solutions will help this, as well as allowing companies to combat the very real threat of cyber hacking by spotting traffic irregularities immediately and taking action rapidly to prevent damage from cyber attacks.
IoT of course will boom during 2018 and beyond. There were already 309 million machine-to-machine connections in 2015, but this is expected to reach 2 billion by 2020. All of these deployments need to generate new revenue streams from connected services and business models. For operators, the biggest trends and opportunities to look at will be fleet and logistics, automotive and metering. Manufacturing has already seen growth with operators integrating IoT solutions into their existing networks to better serve the sector. Operators are already setting up dedicated IoT business units to ensure that they can service the coming growth that IoT will bring.
The EU’s ‘roam like at home’ ruling, easy global travel, growing IoT and machine-to-machine communications will all drive growth in roaming.
Data roaming is tripling year on year, especially in Europe after the aforementioned ‘roam like at home’ ruling and a rise in the number of operators offering LTE roaming services. Further growth is expected in Africa, Asia and South America. Also, unlimited data roaming plans have been introduced in the US, and they’re expected to be offered increasingly elsewhere.
Whilst the free OTT applications are widely used for most messaging nowadays, businesses still use SMS as a critical form of Application to Person (A2P) communication and it’s likely to carry on.
Data Service Providers have been buoyed by the number of businesses harnessing SMS as a secure way to send notifications, verifications and automated alerts to customers. The rise of communication platforms as a service has seen businesses using SMS to keep a customer up to date on flight delays or cancellations, and on the status of shipments of orders – to name just two examples. Individuals might also be sent a one-time validation code by SMS in order to retrieve a lost password or otherwise authenticate a login. The take away from this: although OTT applications are on the up, don’t write off SMS any time soon.
Perhaps the most important thing to consider is the need for capacity. Despite the acceleration in technology, the story within telecommunications remains the same. It is once again the requirement for reliable bandwidth which will drive new global infrastructure projects – effectively preparing the world for 5G.
Will governments release sufficient spectrum needed to facilitate an expansive 5G network? And, if they do, will prohibiting regulations be relaxed enough to build an infrastructure to support the use of the spectrum?
Whether it be collaboration with OTT providers or other operators, cooperation within the industry is certainly required in order to effectively prepare for upcoming 5G demands as outlined in this paper. Ensuring current infrastructure is adapted – and shared where appropriate – will mitigate against the significant CAPEX and OPEX costs associated with such technological advancements.