Wednesday, July 19, 2017

An Industry You Will Not Recognize, Within a Decade

You might not recognize the telecom industry within a decade.

The industry is likely to earn less revenue than at present. The only issue is how much less will be earned. So the industry will contract.

There might be 85 percent fewer telecom companies in business. There might be only five global carriers. Revenue growth might not be lead by new subscribers or even any of the access services (voice, messaging, data).

Services sold to humans might not drive revenue growth, either. And where growth has been driven by consumers, growth might in the next phase be driven by enterprises.

The changes will come fast.

No matter how you look at it, “eras” in the telecom industry are coming faster, and ending just as fast.

Consider voice: the era of traditional voice lasted more than a century. The “VoIP” era arguably lasted 25 years. The era we now are in will not even be characterized by “voice.”

Going forward, the internet, mobility and over-the-top apps are the ways to understand where we are. But even that will change.

The recent decade has been dominated by mobile revenues--subscription growth in developing markets and mobile internet access in developed markets. In the 5G era, the industry should not even be lead by mobile data.

The reason is simple: in the digital era, about every decade, the growth drivers have changed. In the 2G era, subscriber growth was the driver. In the 3G era, messaging, email access and mobile web drove incremental growth.

In the 4G era, mobile web and apps, internet access and video consumption have been key. In the 5G era, it is expected that services for non-human internet of things apps will drive incremental revenue growth.

Another way to characterize industry history is to note that fixed networks once represented the whole industry. Today, fixed line revenue and subscribers are fractions of mobile revenue and subscribers.

Industry structure also has passed through eras, from monopoly to mobile duopoly to competition. Many analysts now predict an era of vast consolidation will follow, within the next decade. How vast?

How about a reduction of global service providers from 800 to about 100, over the next seven years? That is what Bell Labs now predicts.

All those fast-coming, momentous developments are why the Pacific Telecommunications Council has created a new “Industry Transformation Boot Camp” from its existing Spectrum Futures and PTC Academy programs.

The week-long boot camp will provide industry professionals with a concentrated look at what changes are coming, why they are coming, what key business challenges exist and what strategic options firms face.

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