Will 2010 be a Turning Point for the Telecommunications Industry?

Will 2010 be a turning point in the telecommunications industry? Maybe, says Mike Cansfield, Forrester Research analyst.

Cansfield argues that the recession has brought a new realism to the sector, forcing telcos to cut costs and adopt better operating practices. Might might argue this trend has been underway for several years, though.

Uncertain economic growth also will weigh on the industry.

But new converged services might explode, as the boundaries between Internet, telecom, voice, data video and applications continues to blur.

Cansfield argues that a major telco will disappear in a merger or go bankrupt in 2010. The merger of T-Mobile and Orange in the United Kingdom, the unsuccessful merger of Bharti Airtel and MTN Group in Africa, and the purchase of HanseNet in Germany by Telefonica are examples.

"Green" initiatives will be back on the telco agenda in a big way, Cansfield believes.

Mobile device wars will renew with extra intensity and the battle for the mobile apps market will begin in earnest. Just as iTunes in conjunction with the iPod changed the music industry and the MP3 device market, so the Apple App Store in conjunction with the iPhone transformed the mobile data and applications market for both consumers and, now, businesses.

The boundaries between "work" technology and "home" technology will continue to blur. Traditionally customers have bought different communications services depending on whether they were at work or at home.

But these distinctions are blurring, Cansfield says. Many of us today work part of our week at home and connect with the office through our own terminals and fall into the trap of dealing with business emails at home in our supposed down time. But this is not a one-way-street — hence the high number of personal SMS and Twitter messages sent from the workplace.

Net neutrality will be a major issue in 2010, because the evolution of stable and sustainable revenue models for the entire ecosystem is at stake, though most for network service providers.

Also, 2010 will be the year that many governments will recognize that broadband connectivity is essential for economic competitiveness, the delivery of public services, and an inclusive society, and they will step up to the plate to close the digital divide, Cansfield argues.

All of us likely have opinions about the importance of 2010. I suspect some of us really believe 2010 will not be especially noteworthy in terms of marking a turning point in the telecommunications business, but only because the underlying changes are irresistible forces not dependent on economic conditions, government regulations or industry consolidation.

The business is changing in profound ways because end user needs and interests, provider business models and powerful technology trends are profoundly aligned. Nothing is going to stop those changes.