Impact of Disrupting Forces on TelCos

Going back a couple decades, we have seen a great rise in growth rate of Telecom industry, basic reason being the astounding up-rise of technological and digital transformation. The increasing popularity of phones, which earlier were only limited to landline, triggered a shift of consumer preference to portable handsets, with smart phones being the best and most accepted form of communication device in the modern era. As we move forward, talking about only the last decade, the telecom industry has taken a huge advantage of this, offering better connectivity, in better rates, pushing the consumers to increase usage in order to maximize revenues and profits.

This whole era of digital modernization has resulted in non-stop happenings and innovations, bringing in convergence a number of digital applications and software, right at the palm of our hands, flooding in the consumers’ tray of choice. These readily accepted innovations and developments have become a major contributor to the faded forecast of the future of this industry. In order to keep up with the pace of change, and to maintain a grip of potential, and lost consumers, the telecom industry will have to focus on disruptions that will drive the change in the industry. We can talk about a few things that will act as the fundamental factors to manipulate the change.

Content is becoming everyone’s favorite, now more than ever. With Netflix, Amazon Prime, YouTube Red and other free content providers, consumer preference has been successfully captured. Though connectivity is a fundamental need, laying the basis of this smart world, the growing popularity of content makes it ‘The King’. As connectivity becomes cheaper and cheaper, growing competition presses the prices even more, leaving shrunk margins behind. With connectivity providing lesser part of the value chain, content, social media, and others provide a better proportion, leaving connectivity leaning on the shoulders of content, service and product deliverers. Seeing all this, we might want to believe the prediction of one or more telecom companies getting acquired by a content company in the next few years.

Another major source that can be taken advantage of is ‘Internet of Things’. IoT will result in a huge traffic in-flow of the connected devices around the globe. This would result in colossal amount of data in the internet value chain. We will be touching Zettabytes of total volume, which will eventually push the TelCos to provide the data network that can keep up with the huge volume of data. Faster data networks, providing efficiency in storing, processing and managing data would be necessary to provide, for which TelCos will partner with platform providers to bring in tailored platforms. This would also help TelCos cut operational expenses they might incur if they try to bring in their own platforms.

Mobile connectivity and its growth have far outrun the growth of hardline connectivity. Mostly developing countries reflect a higher growth rate of mobile connectivity, with people not owning homes, but definitely keeping a network device or mobile phone. This is a segment, to be targeted in developing markets that TelCos can take advantage of. But as this segment starts filling in, and the boomers reach old age, they will be forced to adapt to the highly technical world, surrounded by IoT, reaching the saturation point for network providers.

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