Four ways the telecom industry will evolve in 2023

Although it is impossible to predict what will happen, a few trends should take hold in the telecom sector.

Like the past two years, 2023 is likely to be another year of turbulence and change.

Greater emphasis on data.

Telecom companies such as T-Mobile, Globe Telecom in the Philippines, and Telia in the Nordics are already leveraging data and artificial intelligence (AI) to improve customer experience and automate their campaigns. Yet there is still a lot of untapped potential for the industry. With the deprecation of third-party cookies, first-party data sources (first party data) will become even more valuable, as long as they are used for the benefit of customers.

Telecom operators have a wealth of data, but most of it is scattered and siled. For example, operational data is stored in several existing technologies such as 3G or 4G, and across multiple platforms including Operations Support Systems (OSS) and Business Support Systems (BSS) In addition, many independent software vendors (ISVs) in the telecom value chain silo their own data . This makes it difficult to consolidate, govern and share data across the enterprise.

A data mesh architecture can help free data from telecom operators. Data meshing makes it possible to treat each domain-focused dataset as a commodity and hand it over to teams who know that data inside out. The data is then shared in a centralized catalog where it can be leveraged to improve business results. A data mesh also ensures that lines of business have the right tools for their job. For example, it allows people who are not data scientists to build, train and deploy data models. machine learning (ML), thereby increasing the adoption of ML across the organization, which can accelerate innovation and enrich the customer experience.

Sustainability and energy costs top priority

With rising energy costs, reducing consumption and increasing sustainability will become priorities, and a data-driven approach can support these efforts.

According to a report According to the European Association of Telecommunications Network Operators (ETNO), the global telecommunications industry produced 2.6% of total carbon dioxide (CO2) emissions in 2020, more than air transport. According to GSMA Intelligence, energy consumption accounted for 15-40% of telecom operators’ operating expenses in 2021, and this figure is expected to increase. For mobile network operators, the majority of this energy consumption (60-75%) comes from radio access networks (RAN). Data traffic loads are intermittent, which means that different parts of the RAN can be put to sleep briefly, even during peak traffic periods, to reduce power consumption. For example, a mobile network operator in Australia was able to reduce power consumption by more than 7% by simply turning off the power amplifier symbol at a site, with no degradation in service. Using AI/ML data and applications, telcos can use intelligent services to monitor and automate this process.

Moving to the cloud provides additional energy savings. Multiple studies by 451 Research have found that migrating on-premises workloads to AWS can reduce the workload’s carbon footprint by nearly 80%. We are already seeing telecommunications companies adopting the cloud, such as the Swedish company Vilma, Spark New Zealand and DISH. Likewise, innovation in 5G core processors can reduce power consumption. For example, in Japan, NTT DOMOCO and NEC have reduced power consumption by an average of 72% compared to existing x86 processors.

More partnerships will grow the 5G ecosystem as networks mature.

The year 2023 will mark the beginning of a tipping point in terms of additional revenues generated by 5G. All major US carriers have rolled out 5G nationwide. In Europe, 34 of the 50 European countries have rolled out 5G, along with 14 Asia-Pacific countries, according to separate GSMA reports. Mobile devices are also catching up: the best smartphones of recent years are all compatible with 5G.

The final barrier to realizing the potential of 5G is the ecosystem, meaning the cross-industry and cross-functional partnerships needed to create 5G services and reduce the barriers to building and managing 5G networks. Private wireless holds great promise for 5G use cases. IDC believes TAM for LTE/5G private wireless will reach $8.3 billion by 2026. But adoption has been slower than expected, in part due to the high cost and complexity of planning, building, deploying, and managing a private network. In 2023, we expect more telecom operators to form partnerships to increase adoption, like the partnership between Verizon and Vodafone to accelerate edge computing.

Transformation of telecom operators

The fourth trend of the coming year will be the accelerated evolution of “telcos” towards “tech-cos” – technology companies – transforming the relationship they have with their customers and the way they operate to generate new revenues. This development has two parts:

First, telecom operators will need to move from operating as connectivity providers to becoming digital service providers, leveraging their networks to enrich their relationship with customers. For example, SK Telecom, based in South Korea, is in the process of transform into an AI company. As for the Swiss Swisscom, it extends the value it offers to its customers by training technical and commercial employees to support their customers on their own journey to the cloud.

Second, telecom operators will have to change their operations to use their network as a platform. This approach will provide a new way to monetize building their network and launch a new MVNO (Mobile Virtual Network Operator) within days, which could also operate profitably with just 10,000 subscribers.

Embracing these four trends will not be easy, as they require employee training and development and, most importantly, leadership commitment. But telecom operators that take this turn will be better placed to accelerate their growth and adapt to new innovations. I expect 2023 to be a year of massive transformation, and I look forward to partnering closely with telecom operators to help them realize that future.

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Four ways the telecom industry will evolve in 2023

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