In 2020, the value of the global telecom industry was worth more than $1.6 trillion. Experts say the sector will grow at a compound annual growth rate (CAGR) of 5.4% until 2028.
But, the pandemic taught telecom companies an important lesson. Their emerging technologies are actually essential. Without these technologies, they risk their survival in an increasingly competitive market. So, what does that mean for the future of telecom?
Keep reading to learn about the future of the sector and significant changes shaking up the telecom industry.
The telecommunications industry, or telecom, is a subsector of the information sector. It comprises wired and wireless phone operators, Internet providers, satellite and cable companies.
These companies built the infrastructure which sends data and makes global communication possible. Data includes words, voice, audio, and video.
However, new technologies in telecom prompted deregulation and innovation in the industry. Now, mobile services are growing faster than fixed lines, and the Internet is replacing voice.
Current Telecom Industry Trends
Even though industry growth slowed, the sector is still more dynamic than before. The decline in revenue is due to changing customer needs, increased competition, a failure to adapt to digital transformation.
The telecom industry will focus on customer needs, network expansion, and infrastructure management moving forward.
Consumers have heard about the rise of 5G for a while now. Yet, it’s only within the last few years 5G has taken off. 5G stands for 5th generation capabilities for mobile wireless communications technology.
5G gives users faster connectivity, higher connectivity speeds, lower latency, and more bandwidth. So 5G isn’t just better for individuals; it also serves entire industries.
Specifically, the education, healthcare, and financial sectors will see tremendous benefits from using 5G technology. Several other industries will benefit too. As a result, Telcos worldwide have invested vast sums of money in bringing 5G online faster than before.
But while 5G continues to get more accessible, Telcos are already discussing 6G technology. Experts say 6G technology will use high-frequency terahertz airwaves. This will bridge the gap between digital, physical, and human worlds.
Internet of Things (IoT)
IoT refers to devices connected to the internet, collecting and sharing data. IoT doesn’t just mean phones, tablets, and computers. Developers can turn almost any object into an IoT device, so the options are endless.
There are 5 IoT categories. They are consumer IoT, commercial IoT, industrial IoT, infrastructure IoT, and military IoT. Motion sensors, smart thermostats, monitoring systems, driverless cars, surveillance robots, and many more items are IoT devices.
Experts say total operator-billed revenue from 5G IoT connections will reach $8 billion by 2024. In addition, the industry expects there to be 75 billion IoT devices connected by 2025.
IoT expansion is crucial to meeting new customer demands. Using 5G capabilities, Telcoes can add value to their customer base with IoT devices. As a result, these devices will be a significant factor in the telecom industry’s growth from now on.
Artificial Intelligence (AI) and Machine Learning (ML)
There is still a big focus on automation in the telecom industry. The expanding 5G network will push for more AI and Ml integration. Telcos can use new data to provide better end-to-end services and connectivity.
Companies can integrate virtual assistance and self-service platforms into their business models. This allowed them to help customers using fewer resources.
Furthermore, AI-powered software can give Telcos access to more consumer data. This allows them to create better solutions for users.
The software detects problems in the network quicker than previously too. So, businesses can streamline customer problems using AI.
Digital Money (FinTech)
Mobile money and wallets are no longer trendy. But, in reality, they are an essential service. Even El Salvador made Bitcoin its official currency, the first country to do so.
Global experts at the World Bank say there are still almost 2 billion unbanked adults. However, the majority of these adults have mobile phones and access to the internet. Thus, Telcos still have a massive market to tap into.
Online banking will continue to see significant growth in the next few years.
As mentioned, the telecom industry is a subsector of the information technology (IT) sector. Yet, information services are growing faster than the telecom solutions mentioned. This includes data processing and computing services.
There are three main cloud computing types. They are Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). As more businesses continue to move online, all three services will drive changes in telecom.
Competition and Diversification
It’s true that more competition initially slowed the growth of the telecom industry. Yet, consumers have a lot to gain from the competition. Over the top (OTT) companies and startups are changing the entire industry for the better.
With more companies, there is a considerable demand to capture customers and enhance productivity. More competition leads to more innovation and new business models.
One of the biggest concerns for the telecom industry is the need for online security. Identify theft, financial theft, and data theft are all still serious concerns.
But, more competition in the market means consumers have the upper hand in demanding better security. While these security threats will never entirely go away, consumers can expect to see enhanced security measures amongst the rise of new technologies.
A Bright Future for the Telecom Industry
Despite the slip in growth, the future of telecom is brighter now than ever before. 5G technology is paving the way for the telecom industry to expand at unprecedented rates.
The growth can seem overwhelming, but when you think about how the pandemic forced people to work, study and communicate virtually, consumers should be excited about what’s to come.
The telecom industry needs to build and maintain new networks to be successful. For companies looking to buy telecom equipment, contact us at Custom Truck today.