Top Telecoms Trends for 2024
From AI and B2B self-service, to de-integration and altnets, here are the top telecom industry trends for 2024, as chosen by some of the Cerillion team.
As per usual on the Cerillion blog, January sees our look ahead at the top telecoms industry trends for the year. In the immortal words of Niels Bohr though, “Prediction is very difficult, especially if it's about the future!”.
We began 2023 reeling from the release of commercial-grade generative AI, which quickly took the tech world by storm. Now, we’re starting to see some real-world applications of large language models (LLMs) and chatbots – and corporations worldwide adjusting their headcounts accordingly.
Inflation has remained at elevated levels, putting strain on consumer finances and business investment in the face of continuing economic turbulence, with crisis after crisis making a return to “normality” a distant prospect.
As we approach the middle years of the 2020s, is the telco industry in dire need of a reboot to correct its course? We asked several members of the Cerillion team for their thoughts on what technologies and business practices will be driving the telecoms sector forward this year.
Brian Coombs
Product Director
Artificial Intelligence
It’s predictable, but undeniable that this will be the top trend of 2024.
More specifically I think the following will happen over the next 12 months: every product, process and procedure that a telecoms company uses will become AI-assisted in one way or another. From creating products to explaining bills, writing reports and answering customer queries – all these and more will be enhanced to make serving customers quicker and easier.
On-premise / private cloud AI models will become good enough to run most of the common use cases, therefore I expect most concerns about privacy and data protection will go away. The latest open-source models are at or about ChatGPT 3.5 levels, so expect GPT4-level versions within the next six months that can do most things required. And of course, the speed of these models will continue to increase as their size will continue to fall, along with their price for use.
And that’s all before whatever OpenAI comes out with next…
5G Standalone
I think we’ll see a real move towards proper 5G Standalone rollouts, particularly as more and more operators begin shutting down their 3G networks this year to free up spectrum.
The high costs and low returns of 5G have up until now seen telcos afraid to go all in, but with talk of 6G already, many telcos are biting the bullet and recommitting themselves to the standard. Vodafone was the first telco in the UK to switch on its Standalone network around 12 months ago, and is now boasting uplink speeds of 273 Mbit/s in tests.
The future of 5G depends on telcos rekindling consumer and business interest, plus a healthy dose of investment, and I think that Standalone could be the shot in the arm that 5G needs to realise its potential and encourage broad adoption.
Sean Collins
SVP of Sales, North America
Simplification
Over the years, telcos have developed a wild array of packages and plans, often leading to confusion and hesitancy in customers when making purchasing decisions. This reflects what’s going on behind the scenes, as telcos have struggled with outdated systems, inefficient organisational structures and pre-digital corporate cultures for some time now.
Telcos are increasingly recognising the importance of simplifying their products and processes to stay competitive, meet customer satisfaction and stay ahead of the curve in the ever-evolving industry. To accomplish this, companies are striving to rationalise their infrastructure and operations, employing automation to streamline workflows.
Telcos need to simplify their products and processes, reduce costs and optimise capex to make them more efficient and effective, while better serving their customers.
Build or buy?
Do telcos continue to grapple with the build versus buy question, or move towards hyperscaling their IT environments?
CSPs must remain agile to evolve their business operations and take advantage of the significant shifts that growth has created, and some have chosen their own development path to support this. But can they keep up with the rapid change of pace when building their own platforms?
Buying software products provides access to advanced features and industry best practices developed by specialised vendors. However, these off-the-shelf solutions might not align with their own unique requirements, potentially leading to compromises in functionality and efficiency.
Is a third way possible? Can telcos take a hybrid approach, leveraging pre-integrated components for standard or mission-critical functionalities and invest in custom development for unique requirements and differentiators.
With many BSS/OSS and SaaS providers catering for a wide range of software needs, buying may be the best course of action for most telcos.
The great de-integration
As network infrastructure becomes increasingly divorced from the service layer, vertically integrated telcos are becoming less essential, marking the end of the one-size-fits-all approach.
Technological advancements and consumer demands have prompted telecom companies to reassess their structures and adopt horizontal strategies, paving the way for more flexible and specialised services that were once bundled together. Combined with the decoupling of hardware and software components, operators are now able to deploy services more efficiently and dynamically allocate resources based on demand, deviating from the rigid structures of the integrated era.
Going forward, I think we’re going to see fewer infrastructure-focused businesses and wholesale networks, and a flood of new services-oriented businesses.
To succeed in this new market, the telecoms ecosystem must embrace different business models and agile methodologies, opting for different monetisation strategies and greater investment to meet the demands of huge digital growth and the changing nature of consumer demands.
As the focus shifts towards specialised services, telcos should consider more partnerships to leverage the relative strengths of other vendors and suppliers, with a focus on delivering more tailored solutions. Those telcos who try to continue operating within the broad, vertically integrated model, will struggle in 2024.
Richard Doughty
Business Development Director
Security
This is probably the single largest growth item that we’ve seen in requirements over the last five years. Back in 2015, security was barely mentioned in RFPs of two and a half thousand requirements. These days, a similar sized RFP will have 300-400 security-related requirements. This is no doubt at the behest of a CISO, which many companies have now recruited, driven by regulation.
We’re also seeing not just the kind of incidents that affect personal details such as name, date of birth and credit card number, we’re talking about major state actors with truly malevolent design and intent trying to get into and disrupt or at least see within telecoms operators’ networks, and this will raise the game on security across the board.
In December, it was reported that Kyivstar had suffered a significant cyberattack, and I’m expecting these sorts of acts to have a huge influence on BSS/OSS suppliers going forward.
Satellite
The adoption of satellite telecoms is the less discussed, less glamorous, partner to the fibre explosion, and I think we’re going to see more of an uptick in people both talking about satellites and their use cases.
The number of satellites in orbit – active and inactive – has increased 50% in two years, and there are now over 7,500 orbiting Earth, 75% of which are commercial satellites like Starlink, handling data and voice traffic for businesses and some residential users.
I think we’ll see much more about satellite communications, more commercial and residential offers, and it will start to be discussed as one of the next areas for B2B as well, like BT’s recent talks with Starlink about providing rural coverage in the UK.
Aggregation & acquisition in the altnet market
In the UK, there’s been an explosion of altnets in the last three or four years – over 100 at least. That’s simply unsustainable. These companies may have laid the fibre, but they haven’t lit the homes. There’s been too much overbuild, so there’s lots of places now where two or three providers have put fibre down the same street, and that’s just madness.
This is simply history repeating itself; we saw exactly the same thing with the deregulation of the UK telecoms market at the start of the 2000s, where local loop unbundling resulted in an explosion of new firms like Bulldog, Pipex and Tiscali. There were hundreds of them, and they went through the same process until most went out of business or were acquired by larger providers. We’ve seen this again recently with TalkTalk acquiring Shell Energy’s broadband customers after the latter was taken over by Octopus Energy.
This is a trend we’re seeing in many markets; the US is giving out nearly a billion dollars in funds as part of the Enabling Middle Mile Broadband Infrastructure Program, with much of that money going to smaller regional providers and county cooperatives aiming to connect underserved rural areas.
I’m expecting we'll see more mergers and acquisitions amongst altnets, with perhaps 10-20% disappearing, and that will only accelerate through to the end of the decade when we’re going be down to something like 10 or 12 altnets in the UK.
Streaming spend slows
I think this year we’re going to see the impact in Western Europe and North America of a decrease in consumer spending on content. There was a surge in consumption of streaming services through the lockdowns because everybody was stuck at home, but consumers have now woken up to the cost of maintaining 6-7 different content subscriptions and are starting to make cutbacks. The result is that big industry players are tightening their belts and reducing staff, for example Amazon is laying off staff at Twitch, Prime and MGM Studios.
I think we’re going to see a big decrease in revenues from the likes of Disney, Netflix and Amazon on their recurring and one-off content spend, and I think that will have a knock on to the telecoms companies who are trying to make a – very late – move into that area.
Tiago Lopes
Product Manager
B2B self-service channels
Over the course of the lockdowns of the early 2020s, digital interactions became the predominant path for B2B sales; even as restrictions were loosened, the genie was out of the bottle, as buyers made it clear they prefer to self-serve.
Digital transformation has blurred the line between B2B and B2C, and B2B buyers now expect the same level of service and flexibility as when they shop in their personal lives. B2B companies will have a lot to learn from B2C in 2024, finally embracing omnichannel to attract new customers and keep their existing ones, leading to higher revenues, lower cost to serve and reduced churn rates.
5G private networks
The driving force behind 5G adoption in 2024 will be private, not public, networks. These configurations empower businesses to establish secure, high-performance connections without being tethered to physical locations.
Private 5G networks can be architected as either wholly owned and operated private 5G networks, where an organisation owns or leases equipment and spectrum, and manages the network in-house, or uses a hybrid public-private cloud service to host its network. This cuts down on time spent maintaining costly legacy systems and sees a decrease in their total annual network spend in the long run.
With worldwide revenues expected to reach $8.3 billion by 2026, at a CAGR of 35.7%, private 5G will open up a vast new source of income for CSPs and drive further growth.
Product-based solutions that pre-integrate new technologies
Product-based solutions will play a pivotal role in 2024, to enhance services and meet evolving consumer demands with new, pre-integrated technologies.
Product-based solutions are allowing telecoms companies to leverage the scalability, flexibility and cost-efficiency of cloud platforms, tailored to specific market needs. Leveraging high-speed, low-latency networks these solutions enable seamless connectivity for consumers and enterprises in areas such as augmented reality, high-definition streaming and IoT services, across industries such as healthcare, smart cities and manufacturing.
Machine learning and AI-driven solutions are becoming integral components of product-based solutions, providing instant and personalised experiences for customers, or supporting backend actors through predictive maintenance and network optimisation.
Read our predictions for 2023’s telecoms industry trends, as voted for by our social media followers.