Future Forward: 6 Telco Predictions for 5G, Cloud and IoT

Marc Price
Jan 08, 2020 CLOUD IoT

2019 was a year in which telecom service providers hyped 5G and took baby steps towards the promise of the technology. While 5G adoption is still in its infancy, 2020 will continue to see the expansion of 5G services and capabilities across a wide range of verticals, reaching smartphones, but encompassing IoT, cloud, and more. The ability to stand up services much more quickly and scale them with business growth will also take on new meaning. We’ll see service and pricing agility continue to drive the marketplace as 5G empowers the service provider of the future.

What can the telecommunications industry expect in 2020? Here are six predictions around 5G, IoT and cloud to consider in the year ahead.

#1: The Rise of “Smart Spaces”

According to Statista, the number of 5G connections is forecast to reach between 20 million and 100 million by 2021, with some estimates putting that figure closer to 200 million.

While operators will continue to struggle with marketing 5G as a differentiated service direct to consumers in 2020, immediate opportunities will arise with the massive connectivity of devices, enabling franchise businesses and people in transit, and creating new emerging revenue from “smart spaces,” such as airports, train stations, conference facilities, stadiums and amusement and theme parks, where there is a high density of users and traffic.

To that end, expect to see a considerable uptick in 5G announcements from carriers bringing 5G into specific locations and creating “smart spaces” — similar to what we’ve recently seen Verizon announce with NFL stadiums and Vodafone announce with London’s Gatwick airport.

#2: Smartphones May Lose Equity in our Digital Life, as Wearables Take Center Stage

While the industry waits for the 5G iPhone to drop, 2020 will be the year we start to see more momentum with alternative devices. IDC reports the worldwide wearables market will top nearly 500 million units by 2023, pointing to the continued rise of wearables in 2020 as well. Major tech companies, including Amazon, Google and Facebook, are working on an array of wearable devices that will offer consumers the same touchpoints to information, including video, AR and VR, apps, search, and more.

Over the next 12 months, we’re likely to see an onslaught of wearables — watches, glasses, rings and bracelets – that leverage 5G, begin to replace many capabilities of smartphones. Over a longer period, and beginning now, smartphones may lose their sole place with consumers as the “go-to” source for all their digital needs.

#3: The Beginning of the End for the Traditional Triple Play

Pricing strategies around bundling communications, broadband internet, and content/television together have largely worked to date because of the different technologies involved in separate lines of business and networks. As communications and content are increasingly provided via broadband networks, including 5G to the home as one option, and as operators continue to acquire and/or forge tighter deals with content players, those pricing paradigms will mostly fall away.

As such, consumers will be in a position to benefit from massive simplification if they move to a single access network — 5G or otherwise — for all their in-home needs across entertainment, connected devices and mobility. Operators will need to compete on service to be the one-stop-shop for consumers, instead of relying merely on stickiness.

#4: Cloud Native Technology Ushers in a Much Needed Cultural Shift in Telco

Cloud native architecture and processes are here to stay and will revolutionize telecom practices as network and IT organizations continue a path of coalescence. Cloud native adaptations are vital to service providers’ future, as these enable greater agility, platform independence, cost reduction, and multi-vendor solutions, delivering on promises where other technologies have failed.

As more telcos embrace cloud native principles and practices in 2020, we’ll see a much needed cultural shift as new and younger engineers and programmers join the ranks.

We’ll also begin to see an overall change in software and business processes, as continuous integration and continuous deployment become part of regular operations activities.

#5: Cloud Native Will Continue to Move Beyond Telco in 2020

Cloud native also means telecom is adopting and benefiting from technologies outside the industry more than ever, creating greater synergies — and opportunities — between telco industry entities and enterprises.

Expect to see this trend continue in 2020 with both software and commercial developments around a newly developed ecosystem as emerging media and tech companies, including big players like Amazon, Facebook, Google, Uber, Lyft, etc. find ways to work more creatively with the telco industry to mutual advantage.

#6: 2020 — The Year Telcos Still Won’t Get IoT Right, but Somebody Else Might

IDC forecasts IoT spending will reach $1.2 trillion in 2022. However, it’s not likely 2020 will be the year telcos get IoT right. Scaling costs for IoT are still prohibitive, and the industry has not done enough to make providing an end-to-end device lifecycle cost effective.

IoT is happening, but telcos risk missing out in a central role. Companies like Amazon are stepping in with alternative solutions like Sidewalk. Touted as another way to ‘own the home’ from a consumer perspective, it bodes the question if longer term we’ll see alternative networks also shift to factories and campuses, as well as what other tech giants will follow suit.

A real danger exists that telcos may not be able to get out of their own way by the time 5G is up and running at scale — at which time a big chunk of the IoT market may already be gone.

Even in its infancy, 5G presents enormous opportunities for telcos now and in the future. And while no one has a crystal ball, cloud and IoT will continue to play vital roles as 5G technologies take shape. For companies looking to stay agile, and ahead of the curve and competitors, a future-forward mindset is a must. Without it, telcos run the risk of being left behind in the 5G era.

NOTE: This article first appeared in The Fast Mode, January 2020.

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