Opportunities abound for telcos, including IoT, cloud, carrier-grade Wi-Fi, 5G and content integration
Just about everything the telecom industry is doing today is completely different than what it was up to 10 years ago. Landlines are nearing extinction; long-distance service is a thing of the past; and the golden egg-laying goose that was mobile data, text and voice revenue is starting to run dry.
The speed of change in the communications industry is being cranked up by born-digital disruptors, however the industry isn’t just waiting around for the next big thing. Here are some of the top technologies that will help carry communications providers through its next metamorphosis.
Connecting the IoT
It has already been established that being successful in the “internet of things” market is going to take way more than neat devices and that IoT is going to be more than just a way to flip on the air conditioning from an iPhone. The IoT will become a complete ecosystem that connects everything we do, from the home to the car to the workplace to the electrical grid. Telecoms seem keenly aware of the potential – in 2015 the industry ranked No. 4 in IoT spending committing nearly $111 million to IoT pursuits. Telecoms are not going to sit back, build the infrastructure for it and watch the world ride piggyback with all the profits like they have in the past 10 years when more agile digital service providers ran roughshod over their business.
Building infrastructure will indeed be part of the deal. Massive amounts of machine-to-machine data will have to be moved quickly and securely. Not to mention that much of it will be mobile, increasing commitments to “5G” and secure carrier-grade WiFi networks. However, telecom companies will also be providing services and capitalizing on the valuable user data born from IoT devices. Verizon Communication’s recent investments in telematics shows not only a commitment to powering automotive IoT, but any “thing” that may require location services.
Cloud computing
Communications providers are facing some great challenges and opportunities in cloud computing. They can potentially use the cloud to deliver higher quality, more flexible and more scalable enterprise IT services at lower cost than on-premise solutions. On the consumer side, there’s a big opportunity for communications providers to offer more cloud-based services that can be accessed, updated and purchased from anywhere.
For example, the clunky, ugly and outdated set-top boxes that have plagued our living rooms since the 70s might finally be on the way out. Both Charter and Comcast are either offering or exploring cable and DVR services that live in the cloud, eliminating the need for the STB. This reduces costs for the cable providers by eliminating the need for on-site installations and manufacturing and engineering new STBs every three years. Not to mention that cloud accessibility may help lure back some cord-cutters that long ago retreated to Roku.
Carrier-grade Wi-Fi
Remember how we said the communications industry will be going big in IoT? Well, that’s not going to happen if constant broadband connectivity is not available.
When it comes to wireless connectivity over short distances, Wi-Fi is hard to beat. Theoretically, it’s faster than the leading alternative – LTE – and can handle bandwidth-hogging services like mobile video for a fraction of the cost. But in practice, today’s Wi-Fi hot spots are notoriously slow and fickle. That’s about to change.
The next generation of Wi-Fi will have the same or better reliability as cellular, hence its carrier-grade moniker. By 2020, more than 90% of wireless hot spots will be carrier grade, according to a 2015 Wi-Fi industry survey.
5G wireless
The pressures of IoT on top of our insatiable desire for streaming video will absolutely decimate “4G” LTE. (Seriously, 3.25 billion hours of video is watched every month on YouTube alone. That’s about 400,000 years, in case you were wondering). And according to Gartner, 20.8 billion devices will be connected to the internet by 2020. That’s a lot of YouTube-ing, Netflix-ing and IoT-ing, and the fifth generation (sixth, if you’re counting LTE) of wireless is being built to handle it. 5G is projected to be about 10-times faster than 4G, with download speeds around 10 gigabits per second.
So how exactly does building all this new infrastructure benefit carriers? Well, all the IoT services they are banking on will not work without it, for one. The consumer revolt that is going to occur when 4G inevitably falls flat would be rather unpleasant as well. Testing of 5G has just begun and it won’t be available until 2020, so hopefully Wi-Fi will help fill in the gaps until then.
Integration with content
It has been said more than once, “one or more communication service providers will be acquired by content providers by 2020.” Well, it is 2016, and it is starting to seem like the CSPs are the ones doing the acquiring. AT&T bought DirecTV in 2014; Verizon has absorbed both AOL and Yahoo; Comcast bought NBC; and Time Warner just bought a 10% stake in one-time arch-enemy of the cable company Hulu.
The disruption of the digital revolution is not lost on CSPs, and they are rapidly turning away from just making connections to providing a host of digital services. This content-driven strategy is just one stage of the CSPs rapid transformation into the full-fledged digital service providers of the future.
Brendan O’Brien, co-founder of Aria Systems, introduced cloud billing before the concept of “cloud” was even on the horizon. The number-one ranked cloud-billing provider, Aria is at the forefront of the recurring revenue revolution, empowering enterprises to monetize IoT and grow recurring revenue at scale. He can be reached at: [email protected], Twitter@brendan0606.
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
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