Predicting what will happen in the telecoms industry in 2014 is a bit like steering a ship through an iceberg field - you know your chances of hitting something are high, you just hope to hell it doesn't sink you.
C-levels in today's communications service provider are starting to realize that all those years of growth, big revenues and comfortable margins are behind them. Their challenge now is to either decide on a radical new course or take their chances with the traditional routes.
The first option is going to require some serious convincing of stakeholders and staff, as well as some serious risk-taking. The second will require the preparation of lifeboats, as well as some serious risk-taking.
Looking at the least-risk predictions for 2014, investment in networks will continue, but slow down appreciably as operators come to grips with the benefits of 4G and LTE. The emphasis will swing heavily to optimizing those networks and finding products and services that can take advantage of them and give them a market edge.
Innovation will likely come from outside the CSP, and we will see increased M&A activity of smaller innovators or service providers with unique offerings.
We will also see increased M&A activity of other CSP as markets rationalize down to two or three operators at most. Any more is proving to be an unsupportable model in developed and saturated markets.
Market penetration - or saturation, as I prefer to call it - is going to dramatically change the way CSPs do business, as they will have to swing concentration away from consumers to market sectors and demographics they have tended to ignore. The enterprise sector will get lots of attention but CSPs will have to invest heavily in products and services to attract them and partner with companies that can help them deliver. Here, we are talking about cloud services, device management (BYOD), security and SDN (where the network becomes an extension of the enterprise not unlike a private cloud).
Also, in the wake of the Snowden revelations there is going to be a massive take-up of data and email encryption technologies, and CSPs are well placed to offer both if they can move quickly enough.
The back office is overdue for a massive shakeup. The boundaries between OSS and BSS have all but disappeared, and the new child will be IT-centric. There will have to be renewed investment in transforming to less complex ordering and service activation systems, software-driven networks and online charging systems, leading to a fully IP real-time environment.
This in turn will lead to a massive take-up of customer-driven services via self-care portals. This is what customers want and the CSPs that can deliver it best will win market share.
I will reserve judgment on the hype surrounding big data and its use as the ultimate customer-experience weapon. I'm still uncertain that we can really know or determine what a customer wants based on their history, nor can we do it ‘on the fly' without starting to aggravate them. Big data will certainly be big in 2014 but probably not in the way it is being sold today.
We will also see a number of changes on the bridge as the seasoned telco captains start to make way for a fresher, techno-savvy, digital era breed of captain more suited to testing those new sea routes.
- Outlook 2014: navigating the iceberg field
- Outlook 2014: telcos must go soft(ware) to survive
- Outlook 2014: make-or-break for RCS
- Outlook 2014: that's it for voice
- Outlook 2014: radical back-office overhaul
- Outlook 2014: the big case for small-cells
This article first published in Telecom Asia December 2013 /January 2014