IoT 3 mins read

5G, new Business Models Transform Telcos

Telcos in 2020: Next year will prove whether 5G lives up to the hype, and if Internet of Things solutions get more traction.

Laurens de Nooyer Laurens de Nooyer

Almost everyone is a user of communications. Whether it is a mobile phone, a fixed broadband service, radio or cable TV, you rely on your communications service provider (CSP) to give you reliable connections.

What you may not realize is that your faithful CSP has been undergoing a very difficult time, with revenues dropping and disruptive competitors popping up every day. 

Because CSP revenues are no longer supported by offering mobile and broadband services, they are on a mission to transform themselves from product-selling providers to services and solutions providers. And next year will prove if 5G lives up to the hype, and if Internet of Things solutions get traction.

Here are my top three predictions for the telco industry in 2020:

  1. Give me 5(G)

New 5G infrastructure is receiving a “high five” as the UK and Europe prepare for 5G spectrum auctions in 2020. (The US and Asia have already started with auctions and execution, and many providers are now jostling for position.) Once telcom operators own their spectrums, they can build their own 5G networks. This will open opportunities for new revenue streams from new business models and ecosystems – on top of 5G.

CSPs will now enter a new area – offering private networks to industry to replace fixed infrastructures with cheaper and easier to use wireless connections. Expectations are very high that customers will offer horizontal market solutions, such as asset monitoring and process control to reduce costs.

  1. Grow up!

As the market matures and expectations in the execution of IoT solutions increase, CSPs will need to have end-to-end vertical solutions ready to go to market. This takes an ecosystem of partners and is not always something a telco wants to manage. They are instead looking for help in building solutions that combine devices, platforms, connectivity, applications and analysis – using partners that have full market domain understanding, support and standardization.

To date, most of IoT solution developments are stuck in Phases 1 and 2 (see chart). There are some vertical solutions already in Phase 3 – use-based insurance for automotive, or smart home solutions for example – but 2020 will also bring expectations of Phase 4 commercial solutions.

  1. Knowledge is power

As telco vendors plunge deeper into IoT-led vertical solutions across businesses, they will require a flexible environment where they can share knowledge and experiences. The best way to do this is with APIs and by putting them all into a single, branded environment, their users know where find them.

CSPs globally will be able to gather and participate in new ecosystems for IoT success, together with their global partners. The sensor environment will otherwise become unmanageable, with up to 29 billion connected devices expected in 2022.

Here we will see two areas of growth in end-to-end solution developments:

  • Massive IoT solutions: Very large numbers of low-cost devices, sensors & actuators that consume very low amounts of energy to sustain long battery life.
  • Critical IoT solutions: Applications requiring very high reliability and availability and very low latency, such as for traffic safety and critical infrastructure, as well as wireless connectivity for industrial processes.

There is tremendous time pressure on telcos from their customers to fulfil these and more expectations in the next year. 

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