#1: Hype Will Continue Around Topics Like 6G and the Metaverse, but 5G Will Be the Real MVP
In 2023 we can expect continued excitement and prognostication around the future of 6G and the power of the Metaverse, but the reality for both is far into the future. We’ll see little more than hype this year.
5G, by contrast, is moving out of the hype cycle and squarely into its realization of true value, especially in areas like 5G standalone and network slicing. The rich set of capabilities delivered with 5G standalone have been elusive, but in 2023 we’ll see standalone deployments start to gain traction and early use cases emerge.
Before the year is out, we will see the commercialization of the first enterprise services leveraging network slicing in several key verticals, including MVNOs and retail.
#2: Advancements in Privacy and Security Will Help Telcos Embrace Cloud Architecture and Evolve Their Relationships With Hyperscalers
As privacy and security capabilities mature in cloud environments, we will see significant progress from telcos placing workloads of scale in the cloud.
The nature of 5G networks (and beyond) are changing traditional network architecture, with functionality now disaggregated across interconnected servers. Network architects are tasked with protecting components at each interconnect, as well as managing the risks associated with a mass number of connected IoT devices which can each represent a security threat.
For these reasons, hyperscalers have made security a prime focus, building secure solutions from the ground up at the scale required to support large networks. In 2023 we’ll see telcos increase integration of cloud native components into their critical infrastructure, as these technologies are able to prove the efficacy of their security capabilities.
As telcos embrace cloud architecture, their relationships with hyperscalers will evolve and we will see greater synergies between the two.
#3: Increasing Pressure on Telco Profits Will Accelerate New and Varied Revenue Models
The telecom industry has struggled to dominate in the digital services era, despite the significant capital they’ve invested into 5G technology and edge architecture. The next few years will prove critical for the industry as it establishes its value with customers and delivers differentiated services.
What’s more, the broader financial outlook will be less positive in 2023, for businesses and consumers alike. Telcos who believe their digital transformations are complete will discover they need to do more to meet consumer demand amidst strong pressure from hyperscalers and direct competitors. We’ll see telcos making more drastic measures to maintain and improve margins, particularly on the consumer side.
2023 will bring some important waves of innovation for the industry, including:
Some of the big players in telecom will move beyond their regional focus. We will see the emergence of global offerings for both enterprise and consumers, as telcos leverage relationships with other operators and cloud providers.
Greater efforts from telcos to redefine their position around marketplaces and move away from the perception that they are merely dumb pipes. Marketplaces offer a new source of revenue both from direct sales and revenue share, while also helping to strengthen the telecom’s core offering by providing special benefits or offers to customers. Maintaining direct control of customer relationships is a key benefit of telco marketplace services, with 78% of CSPs saying that is a top driver for developing a marketplace solution.
A continued blending of prepaid and postpaid service offerings as part of a new, hybrid convergence model. Operators are looking to slim down their legacy billing systems while at the same time needing to create greater transparency — and trust — with subscribers. These two realities will create greater interest in more efficient billing practices in 2023 and beyond.
Indirect revenues will also be a focus in 2023, with enterprise partnerships and embedded connectivity for new devices driving further revenue segments. The emergence of new IoT gadgets, appliances and wearables with embedded connectivity will enable the establishment of new business models for consumer packaged goods while creating new revenue opportunities for telcos.
#4: Industry Standards Communities Will Make Pivotal Progress
The Linux Foundation has been an important catalyst for open source projects within the developer community, helping to not only accelerate technology development but increase speed to commercial adoption. Now more than ever the relevance of open standards across telecom and enterprise will spearhead new relationships and efficiencies.
The CAMARA initiative, or Telco Global API Alliance, was launched at Mobile World Congress 2022, in partnership with GSMA’s Operator Platform. The goal of the project is to align API requirements and publish API definitions and user-friendly APIs. This will usher in a new relationship between enterprise and telcos in 2023 and beyond, creating more seamless coordination and orchestration within the network and business systems, and ultimately, making it easier to buy differentiated services directly from the enterprise, while the enterprise and telco collaborate on the back end. In short, CAMARA will prove to be a breath of fresh area for telcos looking at new ways to work with enterprises and create new revenue streams.
We will also see significant progress with Project Nephio in 2023, an open source initiative of partners across the telecommunications industry working towards furthering necessary steps in cloud-native automation. First launched in April 2022, the goal of the project is to help manage the complexities of building and deploying scalable 5G networks across multiple edge locations by delivering cloud native automation that is faster and easier. Thanks to programs like Nephio, in 2023 we will see the payoff of all the of the work going into supporting high volume, low latency workloads while still reaping the benefits of Kubernetes and cloud native software.
NOTE: This post was adapted from an article that appeared in The Fast Mode, December 27, 2022.