The Future Of The Telco Industry And Impact Of 5G & IoT – Part 1

Technology like IoT, edge computing and 5G are changing the face of CSPs

Communication Service Providers (CSPs) are in the middle of a data-driven transformation. The current scale and pace of change in the Telecommunications sector is being driven by the rapid evolution of new technologies like the Internet of Things (IoT), 5G, advanced data analytics and edge computing.

This is opening up new revenue opportunities, use cases and even the possibility for different types of business models within the sector, changing the way that CSPs operate.  

With 49% of telco leaders set to invest heavily in 5G technology and infrastructure in the next three years and 94% of telcomm executives expecting edge computing implementations to improve operational responsiveness, the future of the sector is rapidly beginning to look very different

With the industry facing so much change, and with so many new opportunities to leverage big data, analytics and unique insights, we sat down with Vijay Raja, Director of Industry & Solutions Marketing at Cloudera to get his views on how the sector is changing and where it goes next.

Hi Vijay, thank you so much for joining. To start us off, we’ve seen so much change in the telecom sector in the last few years and clearly there is a major drive toward the adoption of new tech as well. Which current key headwinds are most pressing for players within the sector?

Sure. So, Telcos are going through a fundamental transformation around who they are and what they offer and I believe there are four key challenges that communication service providers are faced with today.

The first is the saturation of traditional revenue streams. In many established markets, traditional sources of revenue are either plateauing or declining relatively rapidly. 

In the US for example, mobile revenue growth has stagnated. It is currently at 0.3% (2016-2018) down from 6% in the period from 2010 – 2012, and this is now no longer where they are seeing the future growth and potential.

This means that telcos now have to expand beyond traditional revenue streams and open up new revenue opportunities and avenues and the way that telcos adapt to creating and managing new revenue streams is going to be a game-changer for the industry in the future. 

telco revenue

Source: GSMA

The second biggest challenge for providers in the space is how they move beyond connectivity and stay relevant in an ever-changing digital ecosystem. Telcos cannot afford to continue to simply offer end-to-end connectivity to enterprises anymore. 

They now need to go beyond connectivity and be able to provide offerings and end to end solutions like IoT solutions, connected factories, connected vehicles and smart cities and this will become a big new focus for the industry as they work out what their role will be beyond connectivity.  

Thirdly, telcos still lag behind in terms of offering a very personalised and compelling customer experience and in a more connected world they need to be able to transform their customer experience, delivering the right offer or service to the right customer at the right time. 

Data and analytics will play a critical role for Telcos to better understand their customers, deliver an intentional customer experience, to optimise campaigns, to personalise offers and ultimately drive down churn. 

The goal is to deliver the right offer to the right customer, at the right time, in the right context and for the sector this is key to transforming the customer experience. 

Finally, one of the biggest challenges in the industry today is monetising 5G. Telcos have been pumping in over 1.5 trillion dollars into 5G over the last few years, but the real question is how can they monetise these investments from both a B2B and B2C perspective? 

5g market opportunities

Source: IDTechEx

Revenue from 5G IoT is set to hit around $8 billion by 2025  within the sector, that is a big leap forward for telcos but the important question is how are they going to capitalise and expand into offering compelling new services and revenue opportunities? 

These might be connected automotive, IoT services, and smart cities, these are the types of compelling new services the industry must shift towards to be more competitive in the future. 

To find out more about how Cloudera is supporting Telcos in leveraging the power of 5G, big data and analytics, read our latest eBook on how technology is transforming the industry. 

Cindy Maike
VP Industry Solutions
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Vijay Raja
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by Essa Merchant on

I enjoyed to visiting your blog. Very nice information.

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