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The digital disruption in the modern world is well and truly underway. Expectations are that we will live in a far more hyper-connected world in the future, than the one we already are in. At the core of getting the world interconnected is the telecommunications industry, which is undergoing a change in its DNA.
Customer demand to stay connected 24 X 7 is creating the highest demand yet seen for data traffic. And this demand that is waiting to explode in the future as mobile payments, mobile commerce, social media/digital life, smart cities and other imaginative extensions to life on a mobile phone occur in the future. The ability of telecommunications to expand its vistas far beyond the traditional market of voice is only beginning to make sense.
This year is expected to play a key role in furthering this structural change in the industry. Here are some of the top trends in telecommunications that are most likely to play out during 2016.
Trend #1: Telcos will launch digital transformation projects in 2016
Decline in traditional revenue streams, demand for speed and agility, and identifying new business models will drive telcos to invest into digital transformation projects
Trend #2: Analytics will increasingly become pre-packaged in 2016
Demand for analytics will expand from department silos to the entire organization. Pre-packaged analytics, standard use cases and industry best practices will form the cornerstone of adoption in analytics. According to Ovum, an estimated 16% of telco IT spend will be directed towards data management this year,
Trend #3: Billing systems will transform
Current billing systems are either manual or are unable to meet the multi-services billing requirements of the new, digital world. Modernization of billing will drive transformation in legacy systems. New functionality such as omni-channel capability, ability to handle multi-play and real-time charging will be the key trends.
Trend #4: Private cloud will be the dominant cloud form
There is a likely marked increase in telecom adoption of SaaS and PaaS for internal operations. The telecom industry will leverage the private cloud and derive the benefits of an information platform. Cloud-based managed services is expected to see significant traction
Trend #5: Value-added services will grow in emerging markets
Customer demand for ‘smart experiences’ will drive growth for content and applications in emerging markets, resulting in high demand for value-added services (mobile money, gaming).
Trend #6: Virtualization will go mainstream
In 2016, most telcos are likely to increase their proof-of-concept testing of NFV/SDN platforms, with a likely increased adoption in 2017-2020. These initiatives are directed towards enabling telcos to run digitally.
Trend #7: Big data adoption will be driven by specific use cases
Big Data investments by telcos are driven by the use cases of available solutions, rather than by the specific requirements defined by the telco C-suite. An estimate by Cap Gemini suggests the ratio between machine-type communications to human-type communications by 2020 will be in the realm of 30:1
Trend #8: Telcos will explore newer vistas such as smart cities more seriously
Connected car, connected home, smart cities, mobile payments and other digital market opportunities from other industries will increasingly be attractive to telcos. This will drive cross-industry partnerships and increase adoption across new devices. The arrival of 5G technology will also hasten initiatives in this area.
In conclusion, the telecom industry is at the cusp of the next wave of its evolution. This next wave is likely to be much faster than previous eras, and will be fundamentally driven by digital technologies and digital thinking. This year will also be that time of this decade when the industry will use new forms of IT towards its 2020 transformation journey and beyond.