Strings Pulling the Trends in Telecom Industry

By Telecom Tech Outlook | Friday, August 14, 2020

The latest trend among the telecom companies is to provide services that run on advanced technologies and follow an integrated approach to improve the efficiency of the process continuously

FREMONT, CA: In the past year, the telecom marketplace has undergone several changes in a short time, especially with the dawn of 5G technology. The backbone of these changes is an interlinked, internet-based economy. As a domino reaction to the continuous developments and technological improvements, the deployment of big data analysis, AI, cloud computing, M2M, and IoT are advancing with each passing day.

On a yearly average, the telecom companies spend a considerable amount of money and investments on technology, making these expenses the highest of the total capital expenditure. Recently, fiber-based projects took up a significant portion of the costs as the companies required necessary facilities and equipments to fuel 5G technology.

• Changing Revenue and Earnings Model with the Advent of 5G:

The majority of the revenue generation in a traditional model is from subscriptions. By prioritizing the same, companies are designing a trajectory to widen their customer bases and popularize their services at affordable prices. The best prices for the subscriptions and services are enabled by providing an assortment of bundled services. As the bulk orders increase, the average revenue generated per user from a variety of plans also establishes visibility among customers.

A crucial reason for changing revenue models and earnings is the competitive factor considered while allocating pricing. The pricing is relative to the competing organizations, which can result in both leap in revenue or damage to the margins. To prolong the sustainability of the companies in the cutthroat market’s competitive nature, several significant players have ideally sought out the expansion of limits and leveraged newer ideas. As a part of this search for more modern technologies, the advent of 5G and many other eye-catching business opportunities for the telecom companies are formed.

According to Deloitte’s 2019 Telecommunications Industry Outlook, those who provide the fixed broadband service for markets like B2B (business-to-business) segment, and IoT present more revenue-generating opportunities to telecom companies. With newer technologies, more revenue generation is noted, but only after making a significant investment.

• Risks in Telecom Industry:

Even though there is an array of opportunities are present for the companies in telecom sector, staring risks are also present to compensate the same. The organizations should be careful while making heavy investments on 5G, as it is yet to come out of its nascent stage. The telecom companies have not unraveled the synergies from its strategic mergers and acquisitions to decide how to conduct the intensity of prioritization.

The complexities become threefold as the issue of changing regulatory framework comes into play, notably in terms of spectrum launch and data protection policies. The legal implications usually result in a much deeper wound as the global telecom industry is consolidated, as it comprises of a small number of companies that dominate the massive industry.