7 Trends Transforming the Telecom Industry in 2021
Liz Bauer, Chief Marketing and Customer Officer
Looking back at the telecom trend predictions our global experts made last year, you’ll notice two things:
- They came too early to account for the coronavirus pandemic
- They came true anyway
The pandemic actually accelerated the trends we saw gathering steam at the close of 2019, from business transformation initiatives to public cloud adoption to seamless payments.
So where does that leave telecom in 2021? Pushing business model evolution further, whether it’s improving the customer experience or deploying new business models that leverage their 5G investments. The challenges communication service providers (CSPs) experienced in 2020, like closing brick-and-mortar locations and shifting en masse to remote work, forced them to jumpstart digital transformation projects that they would have needed to stay competitive even if COVID-19 never happened.
As you read what my colleagues below are predicting in their respective areas, you’ll see a common thread: companies that embrace what 2020 threw at them, and build upon the progress they made under pressure, are the likeliest ones to capture a competitive edge in 2021.
1. IoT Growth Will Present More Monetization Opportunities – Chad Dunavant, Chief Strategy & Product Officer
CSPs have learned that connecting Internet of Things (IoT) devices for the sake of connecting them isn’t a new business, just a novelty. To achieve growth through IoT, CSPs are seeking more innovative use cases to monetize—the kinds that unlock new value for businesses and their end consumers alike.
We can expect more of those IoT use cases in 2021, particularly in healthcare, according to Forrester. These include, for example, wearables that monitor a patient’s blood pressure while they’re at home. But how will those devices communicate securely to the care provider? How do care providers alert patients through the devices? How will these services be monitored and billed? CSPs are in a unique position to address those needs by offering network slices for those value-added services, and even create a frictionless experience for businesses to use them. But CSPs will need new software capabilities to monetize those services, with platforms scalable and configurable enough to spin them up quickly.
2. 5G Investments Will Accelerate Rollouts – James Kirby, Head of EMEA
In the last year, we have seen the initial rollout of 5G across the world. However, the extent to which we have seen 5G deployed pales in comparison to what is coming in 2021 and beyond. In 2021, we will see a significant shift from 5G trial deployments to real-world, monetizable applications, from connected cars to IoT sensors and monitoring.
The amount of investment in 2021 will prove pivotal to the ultimate success of 5G. According to Analysys Mason, capital spending on 5G will more than double to $23.8 billion in 2021, up from $10.1 billion in 2020. As a result of these investments, we will see network rollouts accelerate, paving the way for revenue-generating use cases in 2021 and beyond.
3. Companies Will Embrace Business Evolution – Richard Ullenius, Head of Customer Centricity
Over the years, companies have talked extensively about undertaking digital transformation. At this point, the term has become somewhat of a buzzword, and despite the attention, most of these large, expensive transformations failed. Why? The answer is twofold—an overemphasis on digitization and an expectation that a successful business transformation has an endpoint. In reality, it should be about building long-term agility to allow your business to easily pivot and evolve as needed to meet the ever-changing demands of the digital market.
In 2021, there will be a shift in focus toward business evolution. This mindset involves managing existing business models while also moving toward innovation. To do this successfully, companies need to take a more holistic, company-wide approach, while dynamically adapting to change. Companies can position themselves for success by building out their business evolution strategy, then outlining tactical steps.
4. Enterprise Competition Will Heat Up – Ian Watterson, Head of APAC
As 5G unlocks new, profitable business models in telecom, the B2B segment is about to become crowded. CSPs will not only contend with each other for enterprise business, but also digital service providers, hyperscalers and other entrants. In 2021, we could start seeing CSPs lose ground to these other players, threatening a repeat of the 4G era.
But CSPs hold key advantages over their competitors. They have trusted, long-term customer relationships, which pay dividends in maintaining partnerships that are the building blocks in enterprise. CSPs can also execute consolidated customer engagement and billing solutions in their B2B platforms. Then there are perks CSPs are uniquely equipped to provide enterprise customers, such as advanced security offers. And being able to combine network priority offers with multiple service consolidation is a market proposition that’s unique to CSPs.
5. COVID-19 Will Have Long-Term Effects on Customer Behavior – Dave Bukovinsky, Executive Director of Product Management
Telecom consumers have adopted numerous new behaviors during the pandemic, from using curbside pick-up to self-serving through AI interfaces. Assuming 2021 is when life begins to resemble pre-COVID “normalcy,” will consumers abandon those changes?
We don’t think so. Psychological research has found that even the most complicated behaviors can become habits after 8½ months. Consumers have adhered to social distancing restrictions for longer than that, so they won’t abandon many of the “Band-Aid” fixes telecom companies implemented to provide contactless or automated service. These include virtual assistants that let consumers get fast, intelligent service 24/7, and remote visual troubleshooting, which helps them get complex device support without needing a field technician to enter their home. Habits aside, more consumers have now experienced the advantages of digital channels, and 75 percent of mid-COVID digital adopters say they’ll keep using those channels long term. Many customer engagement rollouts that seemed like stopgaps to minimize service disruption, then, will become customer expectations.
6. CSPs Will Lay Foundations for Dynamic Ecosystems – Haifa El Ashkar, Revenue Management – Market and Solutions, Strategy Lead
5G will power serious paradigm shifts in how CSPs think, approach and build their ecosystems going forward. The information, communication and technology (ICT) portfolio models in use today—where CSPs package and re-sell vendor offerings to an enterprise customer—will be upended by dynamic ecosystems with co-creation and coopetition at their core, and an open digital architecture as their foundation. To orchestrate rich ecosystems that offer value and innovation for enterprise customers, CSPs must reach for partners outside their comfort zone. That means not just co-creating with tech vendors and/or the enterprise customer, but also with rival CSPs and encroaching hyperscalers.
In 2021, CSPs will lay important foundations for this new world, from cloud-first platforms and decoupled processes to new and diverse partnership strategies. Although many CSPs are still wrapping their heads around coopetition and how to enact the cultural changes needed, they understand that if they drag their feet, other entities will gladly step in to claim the prized role of super orchestrator.
7. Flexible Payments Are Here To Stay, Especially Contactless – Jeff Thorness, Head of Payments
If the COVID-19 pandemic has taught us anything, it’s that businesses need a flexible payments solution. When in-person interactions became impossible due to lockdowns, CSPs and other organizations needed to offer more ways for customers and citizens to make payments. Many offered contactless payment offerings to satisfy safety guidelines, while some expanded into online payments for the first time.
This trend will likely continue, even if restrictions associated with the pandemic abate—more than half of Americans are currently using at least one form of contactless payments. While some consumers might want to revert to “pre-COVID” payment methods, demand will drive adoption and we will ultimately see an increase in payment options.