2024: A Year for Cautious Optimism and Renewed Telco Growth

Telcos are in the middle of a long-term transformative process — or the forward-thinking ones are, at least. Last year, our predictions were generally on the nose, although we were a bit early in one case.

2024 will be another year of smaller, but no less impactful changes. Long-gestating technologies like 5G will continue coming into the metaphorical station. Meanwhile, newer technologies such as AI will start to affect business models but not yet realize their full potential. Finally, expect a continued focus on expanding and diversifying revenue streams. Keep an eye on these key trends throughout 2024.

#1: 5G Will Make Its Real Mark With 5G Advanced

Last year, we called 6G nothing but hype. As we move into 2024, 6G is still just hype — it simply doesn’t exist. 5G continues to be where the real changes are happening, with 5G Advanced the next step in its maturation.

The major problem that has stymied 5G implementation so far is that it’s impossible to do anything as a single operator. For example, any European telco has to contend with the fact that it’s easy for customers to hop from one country to another and that their customers want the ability to use their service no matter where they are. This is where standards groups like 3GPP and CAMARA come into play. Their pivotal work has set the stage for 5G Advanced to roll out, starting with 3GPP’s Release 18, which is expected in 2024.

5G Advanced supports everything from faster uplink speeds to more connected devices for XR experiences (already in early stages with things like Humane’s Ai Pin that supports Bluetooth connectivity) to better implementations of AI/ML and, perhaps most critically, truly being able to roam and be charged for services accurately (which neatly solves our European problem above). Granted, the rollout of 5G Advanced is going to take time — Nokia anticipates the first networks appearing in 2025. The fact that more telcos are working with 3GPP standards means it will be easier for those same telcos to more quickly deploy these new technologies.

#2: Telcos Will Bring Transformation to the Enterprise

It’s no secret that enterprise is where telcos have more room to grow. Up until now, however, telcos have been focusing on transforming their consumer business and the consumer experience. 2024 is where those lessons will start to come into play for building stronger enterprise businesses.

Again, this is going to be a slower development. The consumer transformation is still ongoing, after all. But by bringing a multi-revenue stream focus to enterprise, telcos can start to unlock the value of B2B2X through new partnerships (some of which will be enabled by the developments in 5G). In industries where latency matters, partnerships between telcos, device manufacturers, app developers, and industry specialists could make the difference between securing a new client and losing out on that revenue.

The key word, however, is start. This attempt to bring in more enterprise revenue isn’t new by any stretch, and telcos struggled to make any headway in 2023. 2024, however, is where we’ll start to see early signs of progress leveraging 5G stand-alone advancements such as network slicing. The groundwork has been laid, and telcos that have taken the long view will prove to be in the best position to succeed.

#3: AI’s Real Potential Won’t Be Realized in 2024

Just as in other industries, AI has a lot of potential for telcos. Early use cases have been and will continue to be focused on operational efficiencies, reducing costs and reducing the need for human labor for chatbots. Reducing bloat, however, is only the beginning of what AI can do.

In 2024, telcos will likely start to turn their attention toward the potential for AI to deliver revenue optimization. For example, AI has significant potential to help telcos meet consumers’ growing desire for a hyper-personalized experience. By analyzing a user’s data, AI can help design offers based on a favorite app experience or even offer enhanced services.

Leveraging AI for revenue optimization, like many of the other items on this list, will likely not make great strides in 2024. Using AI for cost savings measures has its value in the interim, however. Companies that take a long view toward AI investment will be far more successful in opening up new revenue streams and realizing ROI.

#4: MVNOs and Digital Brands Will Continue to Proliferate as Barriers to Entry Come Down

MVNOs and digital brands have exploded in the last 5 years, and the MVNO boom is expected to continue at a CAGR of nearly 9% until 2030. These are byproducts of the work that has already gone into the front end of consumer experience, and so it’s easy for telcos and carriers to extend these services to new MVNOs or their own digital-first brands.

In such a saturated market, the ability to offer fast, digital-only onboarding (as just one example) can be extremely enticing to busy consumers who want more seamless experiences from their provider. Younger consumers, in particular, are drawn to the cost and flexibility offered by MVNOs.

For telcos, the wholesale benefits are obvious: unlocking new revenue streams, even in super-saturated markets, with relatively small investments. For this reason, we can expect the proliferation of MVNOs to continue, including seeing legacy telcos around the globe jump into the MVNO marketplace. Verizon, for example, has started to heavily push Visible in the US and even earned a positive review from the New York Times for its speed and affordability. One of our customers, iD Mobile, which is Currys’ MVNO in the UK, continues to increase its customer count despite the saturation of the market.

It’s hard to resist the siren call for bigger growth right away, especially when telcos have been unsustainably stagnant as they have been for the past couple of years. MVNOs and digital brands can provide some short-term growth. However, the industry still needs to achieve true business transformation, and 2024 is the year to adopt global standards and put programs into place that support transforming to new services, new devices, and other things that impact their business. It’ll be a quiet year, but the work done now is what will lead to bigger, more impressive and comprehensive transformations in 2025 and beyond.

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NOTE: This post was adapted from an article that appeared in The Fast Mode, January 2, 2024.