Most commentators in the industry, believe there will be a huge number of developments in the telecom industry over the next coming years.
What can we expect?
There are a number of trends that are already emerging in the telecom industry, and expected to continue in 2023. Some of these are:
- 5G will keep growing
Today’s technologies are opening new horizons, such as convergence in telco and hyperscale and the 5G standalone technology. The 5G technology market in 2020, according to Statista, was already worth 5.53 billion U.S. dollars, and is expected to reach the value of 667.79 billion U.S. dollars by 2030.
- Expansion of Rural telecommunications
Rural telecommunications are one of the most dynamic markets. We are witnessing unprecedented levels of investment to expand broadband access.
According to multiple newspapers, such as The Columbus Dispatch, in rural America, entities are showing themselves willing to spend more on broadband, to improve workforce conditions and infrastructures on such locations.
- Investment on Virtual Reality
The data center market is bracing for exponential growth in the telecom industry. Big tech companies are pouring billions of dollars into virtual reality applications, which will be mainstream sooner than expected.
The metaverse, autonomous vehicles, migration to the cloud… the demand for data processing and storage will only skyrocket. Nearly all major big tech companies have increased spending on augmented and virtual reality (AR/VR) applications, continuing forcing change to the way we shop.
According to the Internal Data Corporation’s (IDC) Worldwide Augmented and Virtual Reality Spending Guide, the forecast is for AR/VR to reach $13.8 billion this year (2022) and grow up to $50.9 billion in 2026.
- Fixed Wireless Access
National wireless operators are making big gains in the home broadband market with their fixed wireless access (FWA) offerings as they take market share from incumbent cable companies. In 2023, passive optical networks (PON) will continue to be the dominant fiber-access technology deployed around the world. Over the next year we are likely to see the hyperscalers, not only hosting telco workloads but also launching connectivity products and services.
These are the trends that will be driving the agenda for telecoms in 2023. Already, as many much-anticipated evolutions of telecommunications network technologies finally start to bear results, operators are starting to focus on user-level quality of experience, innovation in network services and deployment speed. These features are likely to help with the development of new 5G business and consumer applications.
In the short-term, we expect Western European Telecoms operators to weather inflationary and macro-economic stresses due to the essential nature of connectivity services, contracted revenues, a high mix of fixed costs and a sizeable degree of energy cost hedging. Some companies will also have the scope to raise tariffs in those markets that allow competitive pricing.
As we draw nearer to the end of 2022, a new set of opportunities, as well as issues, come to the surface and can impact the future of the telecom industry. A longer period of weakened economic growth due to geopolitical events, will eventually feed into lower revenue growth as business customers delay spending and consumers begin to negotiate or change to lower priced bundles. We may see margins shorten as costs rise.
Considering these emerging challenges and opportunities, the prevailing trends that drive the industry forward and enhance the digital ecosystem of telecoms, will be instrumental in gaining a competitive edge. Moving the network functions to the cloud, and enhancements in software, gives operators a further opportunity to potentially improve financial results. Promoting digital inclusion, enhancing company attractiveness, and developing strong and robust cybersecurity services, will bring opportunities, making companies accountable through more consistent and transparent industry-wide disclosure.
“As of today, there are around 25 operators globally that have launched 5G SA networks commercially. In 2023, that number will grow significantly and will likely more than double by the end of next year”.
– Roberto Kompany, Principal Analyst, Service Provider Networks, Omdia
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Interesting read! It’s fascinating to see how the telecom industry is evolving, and these expectations for 2023 highlight the exciting advancements to come. Looking forward to experiencing the future of telecommunications!