For the past few years, the telecom industry has been fighting market saturation and the increasing demand for data. Competition is driving prices down, while carriers are being asked to invest more and more in growing and expanding their networks. To survive in this dynamic, highly-competitive environment, service providers must be constantly aware of technological advances and must pursue new strategies in revenue generation.
Here are six telecom trends operators need to keep an eye on in 2018.
1. 5G Is Coming
We are just at the beginning of the 5G network revolution, but it is already having an impact on the telecom sector. R&D is well underway for the development of technologies that will eventually power a 5G network—the potential underlying fabric of a new ecosystem that includes big data, the Internet of Things, and smart systems.
Telecoms need to watch for the advances in technologies, such as millimeter waves, massive MIMO, beamforming, small cells, and other emerging technologies. They need to be ready to deploy these advanced technologies as they mature out of the testing phase.
2. The ‘Cloudification’ of Telecommunication Networks
When cloud computing arrived on the IT scene, people assumed that all hardware would soon become software. But it didn’t happen as quickly as anticipated. While the transition to the cloud is taking much longer and is challenging to implement for telecommunications networks, the shift is definitely happening. Undoubtedly, this shift it is going be on the radar for the operators and is one of the vital telecom trends to watch out for this year. Expect for there to be a stronger push towards public and private cloud services, which will require heightened security measures to protect customers’ data.
Virtualization technologies like software-defined networks (SDN) and network functions virtualization (NFV) are revolutionizing networks, making them more flexible, scalable, and cost-effective. A significant driver of this is 5G, which is on its way, but even more pressing for operators is the need to drive down costs as markets reach saturation. Telecoms will find CSPs have an increasing interest in SDN and NFV during 2018.
3. Data Traffic Jams Ahead
According to an Ericsson report, monthly mobile data traffic per active smartphone in North America will reach 25 GB by 2022. Meeting the challenges of this explosion in demand for data will piggyback on new technologies such as the 5G and virtualization, as well as upgrading and improving technologies like deep packet inspection (DPIs).
However, this trend also represents an opportunity for telecoms. So far, it has been mainly over-the-top (OTT) players who have reaped the benefits of traffic growth. To monetize this trend, telecoms should focus on their core business and optimize costs, but they also need to either partner with OTT players or venture into producing their content or applications.
4. M&A Activity will See an Upswing
Mergers and acquisitions have been a significant trend in the telecoms sector for some years now, especially with operators seeking scale to protect their profitability and survive in a cut-throat economy. S&P Global Ratings is anticipating more M&A activity in the US in 2018 than other regions "driven by the convergence of distribution systems and vertical integration."
It is not just industry consolidation that is on the cards. Telecoms should be looking across verticals to broaden their offerings, for instance, partnering with OTT players to deliver content or joining with companies that can help them offer enterprise solutions like software-defined WAN (SD-WAN).
5. IoT and M2M to offer New Business Opportunities
Along with the growth in traffic on mobile phones, a significant surge is expected in the number and type of devices online in the much-vaunted IoT space. During 2017, Gartner found there to be more than 5 billion connected devices worldwide. This number is expected to almost double by 2020. While the proliferation of connected devices may have been slower than some initially anticipated, there is no doubt that smart home, smart office, and connected car devices are finally entering the mainstream.
IoT and Machine to Machine (M2M) technology represent both a huge challenge to operators and a golden opportunity. Narrowband IoT (NB), a new standards-based technology to improve power consumption, system capacity, and battery life, is expected to grow significantly during 2018. NB supports a wide range of IoT and M2M devices allowing carriers to continue to grow their service offering.
The carrier that successfully makes itself an integral part of the IoT revolution is likely to be the one that survives. This is more poignant as market saturation continues to squeeze traditional revenue streams and the demand for data drives down prices.
6. The Rise of G.fast Technology
2018 will see an increase in the implementation of G.fast technology. G.fast enables speeds up to 1Gbps within 500 meters of its distribution point, allowing CSPs to provide faster speeds. Australia is set to use G.fast to increase the speed of its NBN after it was successfully deployed by Swisscom in Switzerland during 2016.
Many of the top telecom trends for operators predicted for 2018 aren’t new. The 5G and the IoT revolution have been on the horizon for some time now—traffic has been growing since smartphones were invented, and mergers and acquisitions have been a smart move for a while.
If there’s a key takeaway from 2017, it is that technologies that support these telecom trends are moving out of the experimental phase and to the point where companies need to consider them carefully. 5G-enablers like massive MIMO and beamforming, and network revolutionizing technology like SDN and NFV can change how telecommunication networks are built and meet the demand for data.