Telecommunication companies (telcos) are at a pivotal crossroads, and apart from getting left behind the competition, the only path is forward, which means embracing change. The first installment of this three-part series delved into one of the most significant influences shaping the new telecom era — Artificial Intelligence (AI). This second part will address another major topic in connectivity, specifically 5G and the Internet of Things (IoT), and offer relevant monetization strategies telcos can employ to succeed in this dynamic and competitive landscape.
5G opportunities: Private networks
The 2G and 3G sunset is ongoing, but the pace of shutdowns is accelerating across Europe, North America and Asia as operators upgrade to 4G and 5G technology. Although 5G has been around for some time, telcos have yet to exploit it properly. To say that 5G will be revolutionary is an understatement, as it will bring unprecedented speed, reliability and scalability, including greater reliability and higher bandwidth than its predecessors. Now is the perfect time for telcos to monetize 5G.
One opportunity telcos should consider is 5G private networks. Because of their security features like encryption, authentication and access control, these networks will allow telcos to create industry-specific solutions driven by secure connectivity. In healthcare, telcos can leverage dedicated, privately owned 5G networks to support applications like telehealth, remote surgery, patient monitoring, etc. In tandem with 5G private networks, telcos can also offer hospitals higher bandwidth to enable AI services like chatbots.
It is important to note that telcos should evaluate their customer and network data before investing in use cases like 5G private networks. By examining this data, telcos can better understand potential 5G opportunities to help outline deployment strategies, ultimately maximizing return on investment. Such an audit will likewise prepare telcos for the inevitable rollout of 6G.
IoT market verticalization
Beyond traditional voice and data plans, telcos can open additional revenue streams through IoT-based services. This opportunity for telcos comes at a unique time as the IoT market moves toward verticalized solutions and specific use cases, unlike in the past, which favored piecemeal and individually tailored solutions. With this market expansion, there are a host of industries for which telcos can build solutions, including everything from farming and automotive to insurance and fleet management. Likewise, there are ample opportunities to branch into micro-segments for small-medium companies or large corporates.
Take the insurance industry, where insurers want to deploy new services that actively reward customers based on their behavior. By working with telcos, insurers can provide willing customers with IoT-enabled solutions that monitor their driving and adjust premiums accordingly. Telcos will play an essential role as partners for smart cities, particularly in managing traffic, collecting waste, ensuring public safety, etc., by helping smart city planners ensure seamless, real-time communication between network infrastructure and the thousands of IoT-connected sensors, devices and cameras.
New entrants and new opportunities
In addition to planning 5G and IoT-specific monetization strategies, telcos should consider how network virtualization, software-defined networks and over-the-top (OTT) services will lower longstanding barriers to entry among new entrants. In particular, network virtualization permits companies to use standard, commodity hardware and software over expensive, proprietary equipment, which is particularly advantageous for smaller players. On top of reducing the capital investment required to launch a new network operation, network virtualization also enables faster deployments through rapid provisioning, empowering new entrants to launch their offerings without the typical time-intensive infrastructure deployment.
While network virtualization, software-defined networks and OTT services will help new entrants compete with established telcos, these technologies also create opportunities for the big players to expand their portfolios to include more creative offerings. In other words, this new telecom era will free telcos from constraints typical of the connectivity they use. By leveraging network virtualization and software-defined networks and partnering with OTT players, telcos are no longer strictly beholden to their network and fiber investments.
Three horizons of innovation
Telcos have three horizons of innovation: today, medium and long term. For now, they need to focus on getting the basics right. While this advice sounds simple, many operators are serving basic tariffs and connectivity and getting sidelined as a result. For the medium term, telcos need to focus on monetizing 5G and IoT, which have existed for a long time but remain underutilized. The final horizon of innovation involves preparing for the future leap into 6G connectivity and IoT ubiquity to position themselves as reliable and capable enablers in this new telecom era.
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