Telecoms
Overview
One Minute Read
Telecommunications companies have helped keep societies going during the Covid-19 pandemic, but that hasn’t translated to strong returns for their shareholders. Indeed the pandemic has only exacerbated a trend that despite massive investments in digital infrastructure and services, the financial rewards appear to accrue to others. The industry will continue to rapidly evolve driven by continued digital technology evolution, demand for ubiquitous high speed data availability and disruptive competitors, however, individual telecoms companies will need to make bold strategic choices of where they can best create value.
Industry Description
The telecommunication sector is made up of companies that make communication possible, whether it is through the phone or the Internet, either through wires or wirelessly.
The global telecom services market size was valued at $1,657.7 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.4% from 2021 to 2028. Companies can be telephone (both wired and wireless) operators, satellite companies, cable companies, and Internet service providers.
Since the late 1990s, the industry has been swept up in rapid deregulation and innovation. In many countries around the world, government monopolies are now privatized and they face a plethora of new competitors. Traditional markets have been turned upside down, as mobile services outpaces fixed-line and the Internet is replacing voice as the staple business.
The telecoms industry employs around 5.1 million workers worldwide.
Drivers
Shaped by the global megatrends and now the pandemic, the industry is being shaped by five major drivers:
Customer Experience - Bigtech has set the expectations for convenience and simplicity.
Regulation - Regulation plays a significant part in defining the operating environment.
New Technology - A continual need to keep up with ever changing frontiers of technology for instance the shift from 4G to 5G and keep up/ahead of competition.
Efficiency - Driving a lower cost to serve in response to increased capacity demands and a need to improve service levels to meet customer expectations.
Growth - Despite fast growing demand for capacity the price per bit is not increasing leading to plateaued revenues. Telecoms companies therefore need to continually seek new growth opportunities.
Transformation
The industry will continue to rapidly evolve driven by continued digital technology evolution, demand for ubiquitous high speed data availability and disruptive competitors.
Transformation to Next-Gen Telecom will require:
Digital-first Engagement,
Next-gen Networks,
Software-defined Infrastructure,
Intelligent Operations,
and ultimately Smart Digital Services.
These changes will impact into other industries that increasingly rely on communications such as transportation, smart cities, energy, financial services, media, healthcare, retail and generally the new normal of hybrid working.
Digital Technology
Digital transformation will drive needs for Business Applications to help transform Core IT, evolve the digital Customer Experience, and create Digital Services.
The need to increased capacity, whether wired or wireless will drive investment in Network & Communications infrastructure and increasingly software-defined infrastructure will leverage Automation and Artificial intelligence to increase agility and reduce cost to serve. BSS/OSS systems will move to Cloud computing to support innovation, flexibility and customer experience, and a Digital Workplace will enable an agile workforce.
Security, Compliance & Data Privacy is critical to secure what are Critical National Infrastructures. Finally, IT Governance & Management will be essential to manage the change and ensure value for money.