Telecommunications companies have adapted well to emerging technologies

Contributed by Ralf Llanasas, WhatPhone Australia

Telecoms have evolved quite well with the times and are likely to continue to do so. The coming years will present the biggest technology trends, and telecoms will have to navigate their benefits and challenges in 2020 and beyond. Whichever side of the tracks a telecommunications business emerges as a result of upcoming technology trends, good or bad, you can be certain that a telco revolution is at hand.

From 5G to AI and beyond, telcos will be met with a new world that creates more industries to service. This new world will open doors to markets that once had no need for telecoms, creating many new opportunities.

A good example is the farming industry’s expected marriage to AI-driven equipment  that will require networks to operate — hence, telecom services. Such a market, once out of reach, will now be a wide open feast for the telco industry.

AI market trends in agriculture suggests a $2.6 billion market by 2025, indicating a massive service market opportunity for telecoms. Source: https://www.marketsandmarkets.com/Market-Reports/ai-in-agriculture-market-159957009.html

The examples go further beyond that, to the smart cities that will bring entire regional governments as business partners, and smart homes expanding consumer wants and opening more service areas for the telecom industry. These opportunities go beyond the typical telecom service of selling phone plans  to consumers and business.

As the telecom market readies for the revolutionizing years to come, even governments are stepping in to protect the sector as a valuable resource for their economic and national growth.

Global telco market

The telecommunications industry is massive; from mobile services to cloud services, and even some traditional media, and beyond. It’s almost impossible to get a specific figure on the entire market size, growth, and revenue, but the certain fact is that this industry continues to navigate technology trends upwards, as has been the case for decades.

For example:

  • The telecom services market alone is set to hit $1.4 billion by 2025.
  • The global telecom IoT market is expected to surpass $18 billion by 2020.
  • The global telecom cloud market size is expected to hit $29 billion by 2022, boasting a CAGR of 20% from 2014.

The growth continues at promising rates and has had significant positive impacts, bringing once out-of-touch third world countries to the global stage. Thanks to telecoms, mobile banking, communication apps such as WhatsApp, social media apps like Facebook and Instagram and rider’s app like Waze and SmartRide have become a staple for consumers and local businesses in third-world countries.  Import/export, once impossible to imagine for local business persons in remote regions, is now a possibility with apps like Aliexpress that can be accessed from a smartphone.

All these advances are being made possible by the telecom industry’s mobile revolution, expanding the market further with data sales that allow access to such world-connecting apps. From the rotary phone to the smartphone, the telegram to email, the telco market has grown and adapted well to past and current trends alike.

With new technology trends expected to hit in 2020 and beyond, the telecom industry is likely to continue its steady progress.

Top 3 technology trends for telecoms in 2020

There are many trends to be aware of, such as cloud technology (good) and advanced cybersecurity issues (potentially bad). But here, we address the top 3 trendsetters that will revolutionize telecoms in 2020.

  1. 5G – Mobile service still takes the largest chunk of the global telecom market, and this continued revenue growth is driven by mobile broadband.

5G expected to boost data mobile traffic, resulting in more revenue for telecoms. Source: https://marketrealist.com/2018/12/ericsson-is-banking-on-5g-for-revenue-growth/

This will be even more apparent with the roll out of 5G. The fifth generation mobile network technology is set to contribute $2.2 trillion in revenue to the global economy, and is already being hailed as the foundation for the fourth industrial revolution.

World governments are aware of this, and have made several political moves on the world stage to protect their stakes in the 5G arena. The politics have been boiling over and, recently, we watched as several world powers stymied Huaweii, an ambitious Chinese player in the 5G space that openly had plans of dominating the global 5G landscape:

  • August 2018 — The United States implements policy barring Huawei and ZTE from supplying any equipment to her government.
  • August 2018 — Australia bans Huaweii from participating in the country’s 5G race.
  • November 2018 — New Zealand follows suit, banning Huaweii from supplying 5G equipment.
  • December 2018 — Canada arrests Huawei’s CFO Meng Wanzhou and the United States seeks extradition.

China, of course, has retaliated with several arrests that include 13 Canadian citizens, along with Australian writer Yang Hengjun in January of this year.

These political moves are a reflection of the high 5G stakes. World powers are well aware of the implications the technology commands, and are securing their telecom infrastructure as resources. In fact, there is an actual race to first for a 5G roll out, witnessed earlier this year as South Korea and the United States got into a public spat about which country launched the first 5G network. Fast forward a few months later, and China now has the largest 5G network in the world –for now.

5G predictions are no hype — its impact on several industries will be massive. The technology will serve as a launching pad for other technologies that will have their own impacts on revolutionizing telecoms in 2020 and beyond. As far as telecoms’ bread-and-butter — mobile data traffic — massive growth is expected with 5G in that area.

  1. Internet of Things (IoT)

The IoT refers to a series of interconnected, interrelated devices and/or machinery. These devices communicate with each other, giving commands at the hands of the user or users. Your smart devices are IoT devices when paired to control other smart devices. And so are smart cities, which are expected to experience a boost in the coming years.

Thus the IoT is already here, but current wireless network technologies have tempered its growth and adoption rate. With the upcoming 5G roll out, however, the IoT will reach its full potential. This means a $457 billion market by 2020, up 28.5% CAGR from 2016’s $157 billion.

The good news for telecoms is the IoT’s network dependence. This means IoT technologies will rely on telecom services in order to function. The wide reach of this technology creates even more opportunities for telecoms in other IoT-dependent industries.

  1. Artificial Intelligence

Artificial Intelligence (AI) will prove to be just as revolutionary as the aforementioned technologies. However, like the IoT, this technology will experience a significant boost with the 5G roll out, given its network dependence. Further, the IoT will also boost AI productivity as several industries will implement both technologies simultaneously.

The global AI market is expected to hit over $202 billion by 2026, up from $20.67 billion last year. But AI is spread across a variety of industries. The technology’s applications are far-reaching, ranging from health care to cybersecurity, robotics, and beyond.

AI-based driverless cars will represent 25% of the global automobile market by 2035. Source: https://www.weforum.org/agenda/2017/06/the-most-revolutionary-thing-about-self-driving-cars-isn-t-what-you-think/

We addressed AI implications for the agriculture sector, creating an expected $2.6 billion market by 2026 in that sector alone. Move on to city markets with self-driving cars, another AI-dominant sector that’s expected to rake in $20 billion by 2025. In fact, forecasts suggest that 25% of automobile sales will be of driverless cars by 2035.

The AI market is huge, and the technology’s network dependence creates revolutionary market opportunities for telecoms.

Final words 

Many trends will shape the future of the telecom market in 2020, as we await the fourth industrial revolution. But trends within the 5G, IoT, and AI space are especially likely to revolutionize telecoms as we know them, even beyond 2020. With 5G as the chief driver given its high speeds, low latency, and high bandwidth, expect to see more political moves by world governments looking to secure their telecom strengths as a major resource for economic and national growth.