The telecommunications industry is in a curious place right now. Mobile phone usage, internet traffic and data consumption has exploded and is only set to accelerate as far as most can see, yet telecoms companies that provide the facility to do any of these things, are struggling to grow at present.
There are multiple issues but principally it is not obvious what business model telecoms companies should adopt in order to secure their futures. Furthermore all kinds of large new disruptive events in the industry are looming over the next decade, from the emergence of new technology that might disrupt the main players, the building of the 5G network, trying to realize the dream of the internet of things and colossal M&A activity.
There are some good opportunities present in the industry, but without careful planning and redesigning of the traditional telecommunications business model, it is entirely possible some of the world’s biggest carriers might struggle to stay independent over the next few years.
As traditional voice, fixed line and messaging business models are eroding away, telecoms companies are having difficulty finding the best method to innovate and capture new business.
All kinds of internet based services are effectively absorbing the key areas that telecoms companies once dominated. The future for these companies involves finding new monetization pathways, but deciding just which to pursue is proving complex for the world’s largest carriers.
The positive for these companies though is that they control the means of distribution and the infrastructure which is an extremely strong business position to be in. Telecom companies are attempting multiple new business models, from providing content, to complete connectivity packages, spreading into new business sectors, consolidation and tiered speed packages. As yet though, no clear method for escaping the traditional telecoms model has emerged.
Every few years the telecommunications industry comes up with another technology designed to replace older networks and handle the increased demands on data, latency and a wide variety of other concerns.
The latest technology under development is 5G and as with other generations it is being hailed as far superior to anything that has been seen before. 5G should provide speeds that will allow the IoT concept to be realized and creating smart cities.
If the technology is as strong as the industry claims, it could have some interesting effects of the nature of competition in the market, because customers may start to choose 5G technology over fixed broadband in their homes for instance.
However some analysts are skeptical and see this technology as another money spinner with limited value, when new Wi-Fi technology might actually make expensive new 5G mobile contracts unnecessary.
Appetite for merger and acquisition in the telecoms industry has been strong for a long time among leading company CEOs. Regulators and politicians, however, have not been so keen. Previous efforts directed towards merging some of the big players in the United States have failed on account of concerns competitiveness would suffer enormously.
Now the Justice Department in the US has lost the case against the planned merger between AT&T and Time Warner the way has been left open for consolidation. Many within the industry say this is required, primarily for two reasons: to compete against the rapidly expanding Chinese telecoms giants, and to plough the required level of investment into the new 5G network. Much change is afoot.
Examine the business landscape in the telecoms industry and how the big players are coping
See just how the environment is difficult and new business strategies need to evolve
Explore some of the biggest M&A deals, why they happened and how they are fairing
Prepare for the new 5G and Internet of thing environments and how they might effect the big carriers
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