Telecommunications Industry Trends
The telecommunications industry is at a crossroads. New technologies and digital native competitors mean traditional providers must rethink their IT infrastructure to compete.
New, more nimble competitors gain entry.
Like so many other industries, the telecommunications (telco) industry is experiencing a revolution built on data and technology. Traditional telco providers have a unique opportunity to take advantage of this revolution. After all, consumers use their mobile devices for more than just making telephone calls: they use them to shop, bank, create, watch videos, take photos, board planes, catch a ride, and so much more.
However, as over-the-top (OTT) content and app providers such as Facebook, Hulu, Netflix, Yahoo, YouTube, and Amazon engage with customers through compelling content, they compete with network providers for market share and revenue. This leaves traditional telcos, already burdened with inflexible IT infrastructure and heavy regulation, struggling to catch up with these digital native competitors.
But telcos have a tremendous asset yet to be fully monetized: the massive volume of data—video, messages, photos, and other information—that flows through their networks. Capturing that revenue opportunity will require an entirely new business strategy built on a robust, modern IT infrastructure.
5G and streaming: the road to value-added services.
It’s not an overstatement to say that the 5G network will be the next revolution to rock the telecom industry. 5G brings three new improvements to the table: greater speed, lower latency, and the ability to connect multiple devices at once. These improvements will allow telcos to offer improved mobile experiences—enhanced with adaptive intelligence and augmented and virtual reality—as well as greater machine-to-machine connectivity, and higher resolution streaming services. The benefits will accrue not only to consumers but also to society in general. Agile 5G networks open the door to opportunities provided by the Internet of Things (IoT) such as smart grids, connected vehicles, in-store marketing, smart buildings and homes, Industry 4.0, and digital spaces.
Telco Opportunities Enabled by IoT
There is a growing sense of urgency to complete the deployment of the 5G networks that will bring the potential of IoT to reality. This eagerness stems largely from the realization that, with a 5G network in place, telcos become uniquely positioned to capitalize on the data they collect.
At Mobile World Congress Americas in September 2018, both AT&T and Verizon continued to discuss who is winning the race to the first 5G deployment, with Verizon launching its first fixed mobile wireless 5G, and AT&T planning to offer a commercial mobile 5G. Meanwhile, GSMA Intelligence forecasts that the number of 5G connections globally will reach 1.3 billion by 2025, covering 40 percent of the world’s population, or approximately 2.7 billion people. Thanks to 5G and IoT, the data capital of telcos will quickly expand, and opportunity will grow along with it.
5G Connections’ Reach
At the same time, traditional telcos are acquiring video content providers so that they can deliver streaming services. In October 2018, AT&T announced that it has plans for a “direct-to-consumer streaming service” as a result of its US$85 billion acquisition of Time Warner. Comcast also purchased NBC Universal in 2011 to take advantage of the evolving media. This behavior allows telcos to deliver compelling video content to complement their existing business, as well as compete with OTT providers and drive more traffic on their infrastructure.
5G depends on agile, cloud-ready IT.
To become formidable 21st-century competitors, telcos need to be able to capture, manage, and monetize data in an agile environment. And that means a solid IT infrastructure upon which to build a data-driven, 5G-network strategy. Not surprisingly, telcos are investing heavily in new infrastructure, with IDC forecasting that the telecom compute-and-storage infrastructure market will reach US$16.35 billion by 2022, with a compound annual growth rate (CAGR) of 6.2 percent since 2017. Investment is critical, but only if it’s building the right type of infrastructure—one that can create omnichannel customer experiences, personalize offerings, deliver content quickly and reliably, adapt and respond to customers in real time, move products and services to market quickly, support 24/7 operations, modernize the back office, and turn data into a reusable, revenue-generating asset.
That’s a tall order, and all but impossible with yesterday’s server, storage, and networking components. The solution lies in adopting a converged infrastructure that can tap the unlimited computing power and storage of the cloud.
Telcos are looking to leverage new technologies and services such as IoT, AI, machine learning, content streaming, and blockchain, which can drive business growth and competitive advantage. These new technologies were not only born in the cloud, they also rely on it to function. However, telcos pursuing cloud as the new operating model to optimize business operations are faced with a dilemma: they want to leverage these new technologies, but for one reason or another (for instance, massive investment in on-premises infrastructure or regulatory requirements), they are not ready to migrate fully to the cloud.
How can you prepare for the future?
The solution is to prepare your organization for the future with cloud-ready IT infrastructure that is available on premises as well as in the cloud: Oracle Engineered Systems. These systems are architected, integrated, tested, and optimized to work together with Oracle Database. They’re integrated with our Oracle Zero Data Loss and Recovery Appliance to eliminate data loss and accelerate recovery across your enterprise. And they provide a seamless path to the cloud when your organization is ready. As you’ll see here, many of Oracle’s leading telecommunications customers have already learned that they can optimize for today, while planning for tomorrow, with Oracle Engineered Systems.