The telecom industry will continue to play a central role in addressing a whole range of social, economic challenges or issues. “By working together, the mobile industry is truly connecting everyone and everything to a better future. That must be at the forefront in everything we do role of mobile technology in improving tomorrow’s society”.
The telecom industry generated $3.1 trillion in economic value in 2015 (4.2% of global GDP) and employed nearly 32 million men and women, directly and indirectly.
The mobile industry contributed $430 billion to public funding in 2015, excluding spectrum auctions, stated Mats Granryd, GSMA General Manager during this year’s Mobile World Congress Barcelona 2016. It was the largest edition ever, surpassing record 100.000 visitors from 200+ countries that came together to shape the future of the mobile industry.
According to GSMA analysts today 63% of the global population are connected on mobile. There are now 4.7 billion unique mobile subscribers worldwide accounting for 7.3 billion SIM connections (excluding M2M). Furthermore, by 2020, today’s fast growing markets such as China or Brazil, will have reached a similar level of saturation seen today in most developed markets, or will be rapidly approaching it.
The physical and the digital worlds are getting closer too fast, forcing telecom carriers (and other industries) to transform themselves, their partner ecosystem and their business models at the same speed.
Chuck Robbins, Cisco CEO believes we’re on the front end of the most phenomenal technology revolution that we’ve ever seen. “The pace of change is something we’ve never witnessed before”. Digitisation will boost the number of connected devices from 18 billion to 50 billion by 2020, said Robbins, and to hundreds of billions of connections in the decade after that.
We see an overall trend in the development of services and capabilities that further empower the mobile ecosystem to make everything more efficient and affordable for consumers and society.
- Mobile network subscribers
1 billion people from developing countries will connect to mobile networks in the next 5 years – 72% of the world’s population will be mobile connected
This will bring the global mobile subscribers mass to 5.6 billion (GSMA Intelligence)
- Voice usage decline
50% decline in US mobile call duration in the last few years (Press, Catalysts, IDC, Gartner, EY analysis) and this descendent trend will continue
- Internet subscribers
Connecting the unconnected across the globe
2/3 of the global population (four billion people) aren’t online yet. Various programs for tapping into this new market segment appear, including Facebook’s Internet.org which already rollout in 38 countries, connecting over 90 million people
Surpassed for the first time basic and feature phones; 2.9 billion smartphone connections have been added since 2010 and another 2.5 billion (net additions) are expected over the next five years
Smartphones accounted for 45% of global mobile connections (excluding M2M) in 2015. Just five years ago, smartphones accounted for less than one in ten connections (GSMA Intelligence).
Are beginning to gain real traction in the marketplace
The number of wearable owners doubled year over year but is still at relatively small levels (under 10%)
Those that do own wearables are actively using them:
- 74% of consumers use a smartwatch on a weekly basis
- 66% of consumers use a fitness band weekly (Deloitte GMCS research).
- Video mobile traffic
Is growing fast, putting more pressure on existing telco infrastructure
- 75% of the mobile traffic will be video by 2020
- Facebook users watched 100 million hours of video on the platform daily by the end of 2015
- Virtual reality
could become the social platform of the future
- Samsung Gear VR is partly powered by Facebook’s Oculus, 360 video could be available soon on Facebook
- a new “Social VR team” was created at Facebook that focuses entirely on exploring the future of social interaction in VR
Facial recognition and finger print identification will become the new normal
- Standard passwords for unlocking smartphones, accessing services, buying online, banking or credit cardholder’s online identity validation could be replaced by biometrics sooner than expected.
- MasterCard already launched a trial of selfies and fingerprints for verifying transactions last year
- IoT & everything hyper connected
Connected everything on smartphones is growing fast, with considerable investments in AI (Artificial Intelligence) startups but we still need viable business models
- Sales of connected devices will exceed those of smartphones in less than two years (EE CEO Olaf Swantee)
- 5 million new things will get connected every single day in 2016 (Gartner)
- By 2025:
- there will be 4 billion new broadband users
- the data traffic each person consumes will increase more than 500-fold
- more than 100 billion things will be connected (Huawei)
- IoT investments will go towards AI startups in the coming years.
”Investors are realising that AI will be extremely relevant for IoT. IoT will simply not work without AI” – Angel Garcia, founder and managing partner of accelerator programme Startupbootcamp
- 40% of households in developed countries own at least one ‘connected device’; the most popular connected devices are TVs, printers, games consoles and cameras
- SmartThings open platform
- Partnership with Microsoft to develop IoT devices based on Windows 10
- Mobile operators entered the connected home space
- AT&T: Digital Life – E2E solution for home security and automation platform connects to its connected car platform, enabling carmakers to integrate home security and automation services.
- O2 UK and AT&T are working on a smart home climate control manufacturer to bring the Digital Life platform to the UK in summer 2016. Another UK
- EE UK is pushing into the connected devices space, seeking to connect homes, cars and businesses
- Democratisation of payments
could be even bigger than digitalization of commerce
- 400% increase in use of mPayments technology from 2014 to 2015; handsets are being equipped with Near Field Communication (NFC) chips, retailers are upgrading payment systems in response to regulatory pressures and consumer demand (Deloitte’s most recent GMCS research
- 10% of the disposable income of the population outside the financial system is spent on unnecessary fees and interest charges, which is the same percentage that a family from developed countries spend on food
“We have the ability to make transactions easier, faster, more secure and most importantly less expensive, which can make a real difference in the world.” Dan Schulman, CEO of Paypal
- Lack of smart cities success stories
although the infrastructure is ready and tested and we have all WIFI cities
Smart, secure, trusted, big data enabled public-private partnership models need to be defined through collaboration between private companies, operators, Wi-Fi providers, solution providers or governments. (Shrikant Shenwai, CEO of Wireless Broadband Alliance)
- We really need 5G
but it won’t be highly available in the next few years
- 4G allows us to watch YouTube videos but 5G will increase the speed considerably, allowing lots of sensors, embedded in everything around us from our watches to our houses or cars, to work together seamlessly. Also, it will be the only way to make virtual reality mainstream.
- Cisco, Ericsson, and Intel (part of Verizon 5G Technology Forum), are working on a new router to bring super speedy 5G wireless networking to homes and businesses by 2017.
- 900 B USD CAPEX infrastructure investment
will be done by mobile operators in the next 5 years to roll out faster networks. The internet has become the invisible air in the all connected world
- Hyper-converged infrastructure
that supports the use of high-performance IT applications such as Big Data and Artificial Intelligence (AI)
- Open hardware and software will transform the industry
- Network efficiency trends such as Software Defined Networking (SDN) and Network Function Virtualization (NFV) become viable strategies
- Ongoing M&A, horizontal and vertical partnerships to support digital transformation & growth
Partnerships and standardization will be needed for digital transformation to truly happen
- Operators are getting involved in connected vehicles, smart homes or smart cities domains, Telcos have to come together and unify their approach and use standardized protocols and collaboration platforms that will make it easy and secure for enterprises to design and launch new digital services – Shelly Swanback, Group Operating Officer, Accenture Digital
- Fixed, mobile and TV services will be offered cross-borders by operators through M&As
- New market structures that separate network layer from service layer centric companies
- New business models and partnerships
- Horizontally, operators could partner around M2M services, Mobile payments and marketing, network infrastructure or procurement and vertically with SIs, SaaS providers, financial institutions, device manufacturers, car manufactures, OTT and startups
- Other industries learn all from telcos
Best examples: Car manufactures fundamentally rethinking transportation
- The cars of the future will have as ground principles connectivity, mobility, autonomous vehicles, customer experience, telemetrics, data and analytics.
- 7 million connected car subscribers were counted in Q4 2015 in AT&T network
- 10 million Ford vehicles will be equipped with 4G within the next five years by AT&T.
- 4 million General Motors Chevrolet cars are already equipped with 4G in the US and Canada by AT&T.
- Connected cars were unveiled at CES 2016
- Ford is now integrating its infotainment service (known as SYNC Connect) with the Amazon Echo home automation hub and Alexa voice concierge service allowing a Ford vehicle to interact with a smart home system and vice versa (Eg: to open a garage door or start the car.
- although almost 80% of households own a car, connected car adoption is still relatively low at 3.6%.
Telco 2020 Infographic
- Deloitte Mobile Consumer Survey
Leaders quoted in this infographic:
- Dan Schulman, CEO of Paypal
- Mats Granryd, GSMA General Manager
- Angel Garcia, founder and managing partner of accelerator programme Startupbootcamp
- Alex Jinsung Choi, CTO & Head of Corporate R&D Centre, SK Telecom
- Liu Guangyi Liu, CTO of China Mobile Research Institute’s wireless department
- Shelly Swanback, Group Operating Officer, Accenture Digital
- Shrikant Shenwai, CEO of Wireless Broadband Alliance
- Yang Yuanqing, Chairman and CEO Lenovo
- Schachtel (Facebook)
- Jessica Westerouen van Meeteren, Morpho’s EVP
- Gu Zhang, GSMA Intelligence
- Olaf Swantee, EE CEO