Without connectivity that keeps up with demand, there is no digital economy, no virtual gaming, chatting or meeting, and many of the technological advances of the past 50 years would remain no more than ideas.
As networks, services and comms technology race to keep up, telecom operators play a pivotal role in meeting the ever-growing demand for data connectivity from consumers, companies and cities.
The accelerating transformation of customer requirements means many operators face challenging investment, marketing and R&D decisions in order to remain competitive and profitable in the face of increased competition from over-the-top and tech players. The rollout of 5G will be the first in a series of major infrastructure investments. From being the undisputed core of the comms ecosystem, where do telecom operators now sit?
Globally, operators face capex scarcity and internal cash flows are not enough to fund investments. Leverages are at an all-time high: an average of 15 to 16 percent of sales at the world’s top 30 integrated operators, and have risen steadily over the past four years. What are the key business and tech strategies that over time will separate the winners from the losers?
There has been no inevitable correlation between capital investment into new technology over the past decade and brand or profit growth. As the industry has become commoditized, so growth has slowed. Most of the value created in the industry has been captured by so-called edge players—those manufacturing handsets, developing apps, building infrastructure, or providing streaming or other digital services. How therefore can telcos create a cutting-edge point of difference in their adoption and deployment of upcoming technologies?
Telecom operators are likely to invest $1.1 trillion in their networks globally in the next 5 years. Even more startling, a recent PwC survey indicates that telecoms operators could be wasting up to $65 billion a year in capex. How therefore can the industry read key trends in future demand correctly to avoid waste on that (estimated) scale?
Telecom operators own a variety of assets, including data and power transmission lines, passive telecom infrastructure, active telecom equipment, core and edge data centers, and they have adopted a number of different business and delivery models. Again, what works in terms of asset strategy and what belongs to a past era?
At Interconnect World, we will focus on these key issues that will shape the future commercial and technological future of telecom operators and thereby the entire digital economy.
