In recent articles, we have focused on the challenges telecommunication companies are facing in their efforts to meet consumer and business sector demand due to the staggering growth in mobile devices, BYODs, high rate packet-based services, IoT (The Internet of Things), mobility, bandwidth, speed and quality. According to Gartner Inc., there will be nearly 26 billion devices on the Internet of Things by 2020. The International Data Cooperation predicts that smart city sensors, transportation, industrial automation systems and the IoT account for 30.1 billion connected devices worldwide.
Currently, the need for change in network architecture and technology is viewed by leading telecommunications companies such as Verizon, Inc. (VZ) , AT&T (T) , Sprint (S) and T-Mobile (TMUS) , which control 95.1% of the market, as expenditures with no ROI in the near future. However, smaller telecommunication company, due to their agility, are far more prepared for this great demand, and are more willing to make the necessary change both in terms of technology and approach.
Emerging Telecommunications Technologies
There are several emerging technologies from network architectures such as software defined-networking to Mobile MESH, that are currently being examined in order to deliver quality online media at the right speed. Further technologies include Coordinated Multi-Point (CoMP) and Collaborative MESH and 5G, all designed to deliver faster data speed,ultra-low latency and capacitate the huge demand for velocity and performance. Most importantly, the technology will ultimately bridge over the gap between consumer and business sector demands, and the traditional technology used in most leading telecommunications companies. Once these are implemented, service operators will have to prove they can deliver high quality service, content and platforms and will ultimately enable to meet today's dynamic demands and take telco's to next stage quality service providing and revenue generation.
In order to generate revenues and see ROI from technology investment, telecommunications companies will have to obtain a new approach and leverage the above mentioned demands into new business models based on content and expertise. We are already familiar with content providing companies such as Netflix, Inc. (NFLX) , Spotify and Amazon.com, Inc. (AMZN) , which are on the one hand, currently utilizing current traditional network infrastructures provided by service providers, while on the other hand serve as a burden on these exact traditional networks.
Such content based services delivered by service operators combined with expertise such as security and cyber can turn what is now being viewed as infrastructure and network upgrade expenditures into future ROI and revenues.
Leveraging ROI Potential with Complimentary Partnerships
Contrary to other markets, the telecommunications market is still lagging behind in creating complimentary partnerships to leverage ROI potential from these new approach services. We have seen the race between Google ($GOOG), Amazon.com and DHL to purchase drone companies that will technologically compliment current infrastructures. The soft drink market has also seen some interesting partnerships such as Coca-Cola, Co ($KO) and Nespresso and PepsiCo, Inc. ($PEP) and Sodastream International (SODA) all designed to create an ecosystem that would combine technology with a new approach to leverage ROI and revenues all the while expanding market share, meeting customer's demand and providing a new customer experience.
Only recently can similar ecosystem partnerships can be seen in the telecommunications market. Verizon, Apple and Cisco's partnership by which the two companies will team up to optimize Cisco System, Inc. (CSCO) networks for Apple iOS-based devices and applications. Cisco also announcedapartnership with Verizonthat combines the telecom company's IT consulting services with Cisco's Intelligent WAN (IWAN) technology -- offering a joint software-defined WAN service for enterprise customers to keep up with growing network traffic.
Will Telecommunications Companies Bridge Over the Gap Between Supply and Demand?
In order to bridge over this gap, service providers must adopt a new approach that will develop new ecosystem partnerships. Small telco' providers will probably be the first to adapt these new changes; this is due to their agility. Ultimately leading telco's will have to either follow small companies if they want to maintain their position in the market or purchase these small companies for their technologies. Either way, telecoms' will have to meet the growing demand posed the consumer and business markets.
Yossi Segal is the Co-Founder& VP of Research and Development for Mobilicom
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