MWC 2019 is now behind us, and as usual the event showcased the latest technologies dotting the telecom landscape. Based on our learnings at MWC and the interactions with our customers and partners, we have identified five key trends that will drive the telecoms industry forward this year. There may be no big surprises, but rather a positive reaffirmation of the direction the stakeholders should take.
If 2018 was a recognition of the fact that trends such as 5G, Internet of Things (IoT) and content would be driving growth in the future, 2019 will surely be about taking the first concrete steps in that direction. Telcos are expected to be at the centre of the new wave of services and solutions, be it self-driving cars running on artificial intelligence or smart cities connected by IoT devices.
Digital transformation, of course, is still high on the agenda for this year. But it will be more about selecting the areas that accrue most value for businesses, instead of adopting a uniform, industry-wide approach to digital transformation. Digital transformation will not be seen as a destination anymore, but rather a flexible approach to enabling ongoing innovation that supports business outcomes. With this in mind, here are our top five trends that will drive the digital transformation of the telecoms industry in 2019:
After the 5G hype of 2018, this year is about starting to deliver on the promises. 5G is expected to bring about vastly more efficient and faster connectivity, along with its low latency advantage and capability in terms of virtualisation and cloud technology. All the publicity is already making customer expectations soar, which in turn, will drive telcos to revamp their network operations to keep up the pace. Also, 5G is likely to vastly impact the Artificial Intelligence (AI) and automation space, in addition to the fast-evolving world of the Internet of Things (IoT).
In this 5G ecosystem, network slicing will be a key benefit for CSPs as a single physical network can be partitioned into multiple virtual networks enabling the operators to offer different services to different customer segments. Network slicing technology also enables operators to provide private networks on an ‘as-a-service’ basis. Crucially, it enables greater operational efficiency and reduces time-to-market for new services. For example, a physical network could be partitioned to simultaneously run IoT, mobile broadband and vehicle communications applications.
5G coupled with intelligent connectivity can open a whole new world of opportunities for businesses and end-users alike. 5G-enabled devices are now starting to make a buzz in the market and in tune with that, CSPs are exploring intelligent connectivity solutions in smart cities. Mobile devices will likely play a pivotal role in providing a gateway to access smart city services. Everyday tasks such as paying for bus rides, getting live traffic updates, information about congested routes or planning doctor visits with a cab arriving automatically at your doorstep at the scheduled time can all be achieved seamlessly with 5G networks. While these conveniences don’t seem too far-fetched, 5G will also see more futuristic applications with augmented reality. Imagine watching a football match while sitting in your living room, along with your friends located in different continents, with all of you getting the same immersive experience of sitting together in a stadium!
Telcos all over the world are already in the process of enhancing their infrastructure and working on the technical aspects of 5G. However, as we pointed out in our MWC 2019 review
, it is also critical for them to define their business models and work out their 5G monetisation strategies, whether that be B2B, B2C or a platform-based approach for B2B2X services. The fastest to embrace the change will surely rule the roost.
IoT has been growing steadily over the past few years based on 3G and 4G technology. In 2019, IoT might finally begin to deliver on its full potential, as we see new applications that will only be possible using 5G’s higher speeds and ultra-low latency.
However, IoT growth will not come from one specific industry vertical. Instead, it can be deployed in an industry agnostic fashion, such as SKU tracking or preventative and predictive maintenance, to reap its benefits. As more and more countries take their first steps towards developing smart cities, intelligent homes will slowly become the default in mainstream real estate along with energy efficient building concepts. Marrying IoT with AI will again bring about a whole new area of opportunities.
A clear IoT Monetisation
strategy is needed to extract the most of this technology. Innovators can offer various pricing models such as subscriptions that will generate a recurring revenue flow or usage-based charging. Depending upon the results that CSPs want to achieve, the choice can also be between pay-as-you-go and pay-for-results models.
Enhancing immersive content
2019 will witness a gigantic leap in immersive content as the market demands increase dramatically. AV1 format
is expected to hit the mainstream, with official support already in place in Microsoft Windows
(beta currently), Google Chrome and Mozilla Firefox. The result will be increased revenue and better customer experience. Also, immersive content will see much lower latency with 5G through the adoption of the Common Media Application Format (CMAF), which can help achieve ultra-low latency, for a high Quality of Experience (QoE).
This year might also see the convergence of OTT with e-commerce, which coupled with advanced analytics and more personalised ads, can open up newer revenue models. In order to earn customer loyalty, CSPs might rely more on personalisation to provide their services in terms of subscription plans, recommendations, content, and even the UI. With personalisation, customers can get access to higher quality and better targeted content. Efficient encoding and delivery methods and capable end-user hardware are already making the production and delivery of UHD 4K, 8K and HDR content more feasible. As 4K HDR TVs become more popular, there will be a higher demand for a richer content experience. This gap can potentially be filled by forward-looking telcos.
Flying high with the cloud
Cloud has been a wider IT industry trend for some time and it’s not going to lose its relevance any time soon. With clear advantages in terms of scalability, lower cost models and easier access, cloud-based telco offerings are likely to grow further in 2019, and many CSPs are also embracing cloud-based ‘as-a-service’ business models. Hybrid cloud ecosystems and enhancement in the value chain powered by the cloud might be one of the defining trends in this space. The hybrid cloud model offers a blend of on-premises infrastructure with public or private cloud services. Therefore, businesses will be able to transition to the cloud smoothly while keeping the flexibility and control that they need.
Edge computing is another dimension of leveraging cloud technology that will enable data processing at the edge of the network. As IoT devices evolve, edge computing will be essential to run real-time services, streamline traffic from IoT devices and provide real-time data analytics.
Keeping data safe and secure
Data security got a lot of attention in 2018. With so many security breaches and hacks
, it will continue to be a prime consideration for all businesses this year. Be it Google or Facebook, no one seems to be completely hack-proof. Along with that, the introduction of the EU’s GDPR
and other similar regulations around the world has brought new challenges for businesses in all sectors. Although GDPR is good news for data security, non-compliance can attract major penalties. Therefore, organisations need to stay on top of their data protection policies, in addition to boosting their data security practices, to adhere to international data protection regulations.
Security threats in telecoms can stem from the ISP/network side in terms of Distributed Denial of Service (DDoS) and other targeted attacks. On the subscriber side, these attacks can take forms such as malware, subscriber data harvesting and device hacking. All of these security threats can lead to significant loss of dollars and information. Telcos can mitigate the risk to a large extent by working on pre-emptive measures such as decentralising and simplifying their DNS architectures and using real-time context aware DNS transaction analytics, among other such cybersecurity measures.
Furthermore, hackers are increasingly using AI to launch more sophisticated attacks using netbots; however, the same technology can also be harnessed by businesses to identify and protect against such threats. Hacks cannot be avoided completely, but the focus needs to be on identifying and reacting to these threats in the least time possible.