18. 4. 2019
there is an expression that can accurately capture the future of the telco
industry, then this is certainly uncertainty. Operators hoped to base their
transformation on new technologies; however, the pace of development seems to
be too slow. Moreover, changing consumer habits at an unparalleled pace, an
increasing decline in revenue from traditional communication, competition due
to innovative business models from over-the-top digital natives are threatening
their sustainable growth. The operators are in a desperate need for change.
The telco industry is
not like other industries. Due to high initial investment in the infrastructure,
business approaches need to be future-safe. When technological changes in the
industry were measured in decades, everything ran smoothly. But what about
today, in times when new technology develops every day?
advent of 4G, wearables, smartphones, and mobile apps have increased the demand
for broadband connectivity and changed the way people consume telecom services.
McKinsey showed that there are already two-and-a-half billion “always on”
digital customers under 25, who are showing a different usage behaviour
compared to the traditional “analogue” consumers. On average, these young
digital users spend 315 minutes online each day versus 126 minutes for
traditional “analogue” consumers.
innovations and behavioural changes are raising challenges for telecom giants
as they still haven’t succeeded in their efforts to monetise the flood of data
running through their networks, while their revenues are declining across the
Graph: Average revenue per user (ARPU) of mobile in Europe from 2011 to
2018 (in euros per month)
The way people
communicate is changing: voice and SMS are no longer “in” as IP messaging
entered the game. Approximately 2.5 billion people worldwide now use at least
one messaging app, which is steering valuable traffic away from telco’s text
services. Similarly, voice traffic has decreased from 50% in 2009 to 41% in
2014, leading to a decrease in voice revenue of 2.7% by 2014. Traffic
fell a further 8.4 % in 2017 and is
accelerate by 15% over the next 5 years.
That is why operators will need to find
additional ways and identified a series of new opportunities to
stabilize/increase their revenue streams in the future.
predicts that there will be nearly 20 billion devices connected to the IoT by
2020, and IoT product and service suppliers will generate revenue exceeding €250
Even though IoT
devices represent big challenges for telco industry primarily due to the high
level of connectivity they will need and a new level of traffic and data they
will generate, they also bring more opportunities for growth. Becoming an IoT
connectivity service provider and offering specialised devices can open up new
streams of revenue for the operators.
pioneering players in the telecommunications industry are expected to enable 5G
The biggest advantages
of 5G will not only improve the data rates, but also capacity and
latency. Ultimately, 5G will ensure less delay and virtually unlimited connectivity,
thus providing exceptional user experience.
5G also seeks to
bring greater reliability, scalability, security and universal mobility to the
telecommunications industry, thereby increasing the number of services directly
linked to the Internet of Things.
However, the telco
industry is not the only sector that expects to benefit from 5G. There are
numerous technology giants that are trying to force the development of 5G. That
is why it is in the hands of the operators to keep the momentum by offering technology
and services that the market demands.