Deconstructing Telecom Trends for 2016: The Making or Breaking of Network Operators

Global business connection concept on financial graph, Elements of this image furnished by NASA

In the rapidly evolving telecommunications industry, it’s critical to deconstruct the jargon and get the meat off the bone in order to stay up with the latest trends. Otherwise, you’ll drown in acronym-laden forecasts. That’s why I’m biting off a chunk by focusing on three key trends that are dominating the industry: security, integration and partnerships.

Beefing Up Security

The privacy vs. security debate has been raging lately, particularly with the recent court order demanding that Apple unlock an encrypted iPhone. While carriers need to continue to focus on providing data and voice services that are high quality, reliable and affordable, security is a trend that can’t be overlooked. Carriers have a role to play a pivotal role in fighting new and emerging threats. Some tech diviners predict that customers will demand proactive protection throughout the entire Internet value chain. It may very well reach the point where carriers could be expected to answer such calls with technical and operational innovations. So in the case of security, carriers need to position themselves on the right side of history—or else fall behind the times.

Integration and the Internet of Things (IoT)

As the number of embedded “things” requiring connectivity continues to skyrocket, telecom companies should be on the lookout for every opportunity to increase revenue. For those eager to expand, alliances and partnerships can usher in a diverse range of capabilities and speed time-to-market. Deloitte predicts that the manufacturing, transportation, utilities, retail and hospitality industries are destined to be major contributors to this dynamic and complex ecosystem, particularly within the enterprise space. As “smart cities” take hold, telecom companies will be able to insert themselves into public sector growth. In fact, public sector usage is anticipated to catch up to the private sector in 2016. Partnering with cross-sector industry players will allow operators to expand into new territories without reinventing the wheel.

Seizing the ‘First Mover’ Advantage

Developing markets are a prime example of areas that offer significant opportunity and where I see an increasing demand for Unified Communications. Forging alliances is critical to growth, and network operators will gain a ‘first mover’ advantage over competitors by establishing partnerships in order to rapidly deliver new services. The alternative is that operators develop such services themselves, but it inevitably means slow time to market and delays in service monetization.

Staying Trendy

Even if you aren’t destined to be first to market, good partnership can ensure you don’t wander into irrelevance. For example, Airtel’s recent joint ventures with the National Bank of Kenya and Kenya Commercial Bank (KCB) might be playing catch-up to telecom giant Safaricom; however, end users are certainly benefiting from enhanced financial inclusion. Airtel, of course, benefits from a deeper market penetration and an increasingly tech-savvy customer base.

Innovative Partnership Models Expand Portfolios

As I have touched upon, new partnership models are enabling network operators to rapidly add products and services to their portfolios. This includes Software as a Service (SaaS), Over the Top (OTT) voice and messaging services, cloud communications and Platform as a Service (PaaS).

A Risk vs. Reward Scenario Where Everybody Wins

With the maturation of SaaS and OTT models, a balance is being struck. Network operators have the ability to explore and adopt new services with limited risk and the possibility of tremendous rewards. SaaS and OTT are allowing operators to seamlessly incorporate existing services into their businesses and packaging those services for users. Just like in the Airtel example, the benefits move along the value chain from network operator to consumer. Through partnerships with SaaS and OTT providers, operators will build new lines of business and capture new revenue. Moreover, revenue sharing models can ensure side-by-side growth. In the case of OTT services, operators must move beyond one player benefitting from another’s investments. Partnerships with shared value will produce a win.

Did I miss something you think is critical for 2016? Please give your feedback in the comments section below.

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