The telecom sector has maintained its critical role in today’s society by allowing us to still communicate and work together, even when it felt like the whole world has stopped. Without it, the transfer of information on a global level would be – if not completely impossible, then at least rather complicated. This data transfer is done through the internet, phone lines, cables, or wirelessly by voice, words, audio, or video, practically anywhere in the world. The support for this endeavor is given by satellite manufacturers, telephone operators, internet carrier providers, and cable companies.
With all this in mind, we can’t help but wonder: “What are the keywords for Tlecos future development?”.
The list would have to include: deployment of 5G, initiation of 6G, cloud computing, Internet of Things (IoT), and network optimization.
There is another important aspect of telco development – the vital role it plays in shaping other industries. 5G alone will pave the way for automated vehicles, smart cities, automated factories, and a new wave of business communications.
Yes, we’re in for an exciting ride. Fasten your seat belts.
Sustainability as a key topic of discussion
The challenge for the telco industry and broader tech sector remains doubled by the fact that there is a need to reduce its carbon and environmental footprint while grasping the opportunity of developing new technologies and growing new businesses.
In 2016, data centers had consumed 2% of the world’s electricity production. By 2026, it is expected to rise to 3,5% of global emissions. By 2040, it will be more than 10%.
Additionally, the ICT industry accounts for 3 to 4% of global CO2 emissions, about twice that of civil aviation. And with global data traffic expected to grow around 60% per year, the industry’s share will grow further unless investments in energy efficiency and renewables can offset the effect.
As a specific segment within the ICT industry, telco operators have a sizable impact on both CO2 emissions and waste.
According to the International Energy Agency:
Sustained efforts by the ICT industry to improve energy efficiency, as well as government policies to promote best practices, will be critical to keep energy demand in check over the coming decades.
In the next few years, we expect some changes.
For starters, people in the telco industry are working hard on creating new ways to cool data centers. Instead of standard air conditioning that blows cool air around the servers, they are working on technology that will cool the aisles instead of the entire room; splitting the cooler front side of the racks from the hotter back end, and differentiating the higher loaded racks from the lower loaded ones, and spot cooling those.
Another innovation is to use water instead of air as it is more than 3000 times more effective. This can reduce the environmental impact by 50% over the entire lifecycle of the building (20-30 years).
However, the problem does not end with just cooling them. Data centers require significant infrastructure for power. The electric charging facilities will provide new business opportunities because data centers in the wider city context can provide the potential for synergies with the broader economy, with the potential of turning them into heat venters, power centers, or community centers.
Also, national and regional policymakers and regulators have to be proactive, applying cross-sectional principles like the circular economy, applying sustainable business practices such as cradle-to-cradle design, as well as energy and resource efficiency.
Connecting the world – are we nearing the end of the digital divide?
The digital divide is the gap that forms between individuals with access to the Internet and those without. This goes mostly for the rural areas, not yet covered with Internet and mobile phone access, unavailable and/or unaffordable in vast areas of the undeveloped countries in the world. Since you are reading this, probably on your tablet, laptop, or mobile phone, you can’t even start to imagine what life is without the internet. However, we are the ones who should be most aware of the digital divide.
A study by Broadband Now found that 42 million Americans, mostly in rural areas, don’t have broadband internet access. As schools, businesses, and government services continue to move online, broadband access isn’t a luxury, it’s a necessity.
In 2019, the FCC added the Rural Digital Opportunity Fund (RDOF) to the USF to direct money towards additional unserved rural areas and set higher speed standards than the Connect America Fund. A total of $9.2 billion in funding over the next ten years was allocated from the USF to service providers through a reverse auction (where ISPs bid for the funding to expand service) in November 2020, with an additional $11.2 billion in funding to be allocated in a second auction to come. The American Recovery and Reinvestment Act of 2009 allocated $7.2 billion towards broadband initiatives for low-income and rural communities.
With this support, providers have made notable progress towards universal access. In its January 2021 Broadband Deployment Report, the FCC found that in 2019 alone, the number of Americans without access decreased by more than 20%. Between 2016 and the end of 2019, the number of rural Americans lacking access to 25/3 Mbps service fell by over 46%, nearly halving the gap between the percent of urban versus rural Americans lacking high-speed service.
The latest measure has been the bipartisan infrastructure bill passed by the Senate Tuesday directs $65 billion toward extending broadband networks to people who can’t access them or afford them, along with significant investments into transportation and utilities. While the bill defines broadband service as a modest 100 megabits per second for downloads and 20mbps for uploads, it also contains several meaningful protections that will benefit all kinds of broadband consumers. While it seems promising, we’ll have to wait and see how it pans out.
Trends to look out for in 2022
Since recently, there has been plenty of talk of the telecommunications industry becoming “uberised”.
What does this mean exactly?
It means that it will become the subject of arbitrage by more innovative and demand-led cloud-based platform providers.
If you don’t believe us, just ask industry analyst and futurist Martin Geddes, who predicted that established telecom players will be overtaken by new advanced platforms which bring together voice, messaging, data, media, payments, and delivery. In this demand-led model, profit will come from the ability to meet and surpass customer expectations when it comes to the quality of service.
Just like Uber or Airbnb, this new business model will capture the dynamic nature of the market, matching demand and supply with greater speed and accuracy. Just wait and see.
The Babel Fish
Can you imagine a world where the study of foreign languages is completely unnecessary? A world where everybody can communicate with no limits? No? If you dig just a little bit into the world of instant translation, it might start to seem more plausible.
These features will be built into most software platforms, realizing the vision of Douglas Adams’ “Babel Fish”.
In his vision, people can instantly communicate with anyone at a global level. There would be no more barriers between different markets and consumers, providing every company with a reality of a global reach. And now, imagine the vast opportunities the telco industry will have once this dream becomes a reality. That day is closer than you might think.
Who will be the Telco leaders?
The future always seems a little brighter when you know you’re the one leading the pack. To achieve the leadership position, Telcos are doubling down on both infrastructure enhancements and operational efficiency.
The leaders are sorting out their business priorities on 5 levels:
- The brand is a promise to stakeholders and it is far more than the collection of products or services offered by the company. Telcos are realizing that to be a true leader in their industry, they need a way to not only speak to their current customers but adapt to what new generations of users want to see.
- Strategic differentiation leads to the desired reputation, creating a defensible competitive advantage, and influencing preferential behaviors in the value chain. For this, tools like positioning strategy, design thinking, and innovation programs can help traditional telco companies break out of their set ways.
- Revenue growth reflects the initiatives used to drive new customers, revenues, and market share for the organization. It is a top-line priority that is in the long-run closely connected to both brand development and strategic differentiation.
- Operational efficiency focuses on reducing costs, while improving existing performance, and optimizing existing landscapes. While this isn’t a top priority, this is a goal that essentially supports the top 3 ones.
- Regulatory compliance is a basic need in the Telco industry. This means that the company simply must comply with legal requirements, primarily in the H&S segment.
A company that understands this equation – will most definitely thrive in the future.
Are numbers on the Telcos side?
The telecoms market size is expected to reach $3450 billion by 2022, thanks to the increasing development of smart cities and emerging market growth.
The top opportunities in the global telecoms market will arise in the wired telecommunications carriers’ segment which will gain $338.8 billion of global annual sales by 2022. Telecoms market-trend-based strategies are affordable and fast internet using Wi-Fi, 4G, and 5G wireless communications technologies and offering video-on-demand services along with fixed-line services.
With all this development of advanced technologies and growing government initiatives, the scope and potential of the global telecoms market are expected to increase in the next period. The increasing investments in wireless communication technologies and expanding the offerings into emerging countries are future strategies you should keep an eye on.