In case you haven’t already downloaded “The BICS Report”, do so now and find out what are the main drivers shaping the wholesale telecom industry in 2018.
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The BICS Report offers an overview of the telecoms industry today, highlighting the most pressing concerns and challenges, as well as identifying opportunities for innovation. Eight key focus points are examined, and supported by findings from BICS’ own network traffic and activity.
Much industry chatter in recent years has focused upon traditional voice services, and their unstable role as a revenue generator in today’s shifting market. Voice revenues are in decline and profits are also suffering from decreasing termination rates. Over-the-top (OTT) services such as WhatsApp, Snapchat, Facebook Messenger and Skype are fast replacing traditional voice and SMS as the primary method of communication for consumers and, increasingly, businesses.
These services are underpinned by VoLTE and voice-over-IP (VoIP), both of which present new opportunities for players across the telecoms landscape. Greater mobility and demand for roaming services will fuel the further roll-out of VoLTE services, with international traffic expected to grow by a CAGR of 99.3% over the next four years to reach 133 billion minutes by the end of 2020.
Despite this optimism, cutting costs will remain a crucial step for many CSPs in order to accommodate for financial losses from traditional voice. A number of potential strategies have been trialled by telecoms players to mitigate damage; from using wholesaler services and embracing the cloud, to simply buying up the competition.
Much of this competition has originated from the explosion in digital service provision. The popularity of OTT communications apps is fuelling demand for data, and, as infrastructure and connectivity improves, this phenomenon is going global. New regions are launching LTE services at a rapid rate, with the number of subscribers expected to continue its upward trajectory. BICS has already seen 4G traffic tripling year-on-year across its network, and as services are deployed across more regions – and awareness of the EU’s ‘Roam like at Home’ ruling gathers pace – IPX interconnections and LTE roaming traffic will increase.
It’s not just consumers who are hungry for data. A huge range of industries – from automotive, retail and utilities, to home security, architecture and agriculture – are adopting IoT strategies which will require 5G networks to support myriad use cases.
In addition to usurping traditional phone calls, OTT apps are also overtaking the humble SMS as the messaging tool for many. However, the SMS is far from dead; instead it is being revived as a way for businesses to instantly and reliably engage with their customers. Furthermore, whilst availability is increasing, 3G and 4G connectivity are not yet ubiquitous. Until that stage, SMS will remain essential, with innovative DSPs even integrating this traditional technology into their services, to ensure communication with all end-users, no matter where in the world they are.
These trends are at different stages of development and realisation in different geographical regions, however, all are having some degree of impact on a global scale. Why? In large part, because as a planet, our people are more connected and mobile than they’ve ever been, and where people will travel, so too will their smart devices and expectations of connectivity. Europe’s scrapping of roaming fees in June this year may well set a precedent for ruling bodies in other localities to follow. This may strike fear into the hearts of many in the telecoms industry, but it will also open the door for new monetisation prospects.
To succeed in the market, telecoms players need to take an intelligent approach, and differentiate their offering to attract and retain customers. Intelligence equals accurate insight, which can be gained through business intelligence solutions which gather and analyse data. This will allow operators to make more informed decisions about future strategy, as well as developing new, tailored services.
Gaining insight into customer behavior needn’t just span service use at home. Operators can also identify silent roamers, and unlock new revenue streams by delivering roaming packages which appeal to their usage profile and activity.
Drivers Ss Telecoms Group
The growth of the IoT will also fuel the need for business intelligence tools, as companies require global IoT connectivity to support remote configuration and continuous connectivity. This will be crucial in industries such as automotive, logistics and metering, which will offer the greatest CSP opportunities. As more and more devices are connected to the IoT the threat vector will widen, placing more devices at risk of hacking, and more users at risk of having their personal data accessed, or falling victim to fraud. However, this also opens the market for fraud prevention solutions, which will prove crucial to companies looking to launch IoT propositions.
Whilst IoT-related fraud may be relatively new, traditional voice and SMS fraud are an ongoing concern. One solution being examined to mitigate instances is crowdsourcing. As a result of increased mobility and availability of roaming services, telecoms fraud is now a global problem which spans countries and borders. As such, a global, collaborative effort is required to tackle it, involving the sharing of knowledge and resources.
The hunger for data seems insatiable, and this will continue as a key focus area for all telecoms players. Developments in network infrastructure and hardware must keep pace with consumer and business demands if the industry is to deliver on the expected roll-out of 5G in just a few years’ time. Where traditional providers cannot deliver, new players are entering the fray. Large technology companies which are consuming huge volumes of data are beginning to invest in the infrastructure needed to support this in a bid to guarantee their future success. We should see the 3GPP’s 5G standardisation document, Release 15, by the end of next year, but it is not until 2020 that the second, final document will be released.
Drivers Ss Telecoms Logo
Finally, the trend for innovation in the wholesale market must continue if these businesses wish to remain buoyant. Traditional play has been disrupted and there is little which can be done to reverse declining voice revenues. Wholesale business and revenue growth will thus depend on two things: establishing new services and gaining new customers. We’ve seen the sector’s movement into the provision of things like interconnection and hubbing, fraud prevention, cloud services and mobility, and no doubt other such services offerings will spring up as demands change. It is now up to the traditional telecoms industry to keep pace, or else fall behind the risk-averse, dynamic digital players.