In 2023, the world is in a state of flux and uncertainty. The telecommunications industry is also plying big winds of change as 5G networks expand, capabilities increase with 5G-Advanced technologies, digitization grows across the economy, and companies evolve to green and sustainable operating models. But which direction are those winds heading, and how should communications service providers (CSPs) change tack to navigate these uncertain times?
In their Global Mobile Trends 2023 report, GSMA Intelligence took an overarching view of the major trends to think about this year—casting a wide net from 5G consumer and private networks, to sustainability and security. We at CSG worked with GSMA on the report and have even discussed some of the key trends in a webinar you can watch here. In it, our own James Kirby, SVP, Global Telco, and Eric Carrasquilla, President of Customer Experience, deliver deep-dive insights joined by Josh Holbrook, ATN International VP of Strategy & Planning and Tim Hatt, GSMA Intelligence Head of Research & Consulting. Here’s a preview of what you’ll learn.
The Search for the Killer Use Case Continues
5G reached 1 billion connections in 2022, taking it to around 12% penetration of the mobile customer base globally. Volumes will continue to grow in 2023, with a net gain of 500 million 5G customers and penetration reaching 17% (and much higher in leading 5G markets like the US, Japan and Korea). To put it in perspective, 5G has achieved this level of uptake two years faster than 4G on a comparable basis, which reflects supply-side (network coverage) and demand-side (consumer willingness to upgrade) factors moving in the right direction.
Faster connectivity is good, but speeds will not sustain pricing premiums (and therefore revenue growth). 5G-enabled offerings need a “wow” factor to attract new customers or convince existing ones to spend more. Extended reality (XR) is a candidate here—it has the potential to usher in a new age of immersive consumer experiences that benefit from 5G’s speed, latency and capacity. But true metaverse use cases, let alone mainstream consumer adoption of them, are still a long way off. Until we see some key indicators change (including VR headset ownership, which is stuck at 5-10% of households even in advanced countries), it’s hard to project advancements. We saw some gains at MWC23, more are needed.
Enterprise and APIs: Can It Work This Time Around?
The strategic push for CSPs to monetize enterprise verticals isn’t new—but it’s gaining new momentum. Enterprise accounts for around 30% of telecommunications industry revenue overall, compared to 20% only a few years ago. Private networks, slicing, edge and IoT are all gathering pace with enterprise buyers. Hyperscaler presence in enterprise services, once seen as a competitive threat to CSPs, is now one of coopetition with CSPs and vendors. This was very much on display at MWC23 through partnerships involving AWS, Microsoft Azure, IBM and a host of other cloud groups with operators.
Beyond selling 5G and cloud into the enterprise, there is also a renewed push to monetize the network through APIs. CSPs had tried this 10 years ago and failed. However, the lessons they learned around fragmentation have translated into the current effort—Open Gateway—to be just that: open. Exposing APIs (which connect into network functions) allows developers to directly tap into network capabilities.
5G offers new network capabilities and users who want them. Providing developers with access to open APIs would support that. There also appears to be a greater level of commitment from CSPs compared to previous efforts to expose APIs. You could tell just by looking at the number of CSPs involved in Open Gateway and the prominence of API demos (showcasing 3G and 4G initiatives, not just 5G) in their exhibition booths at MWC23.
Ultimately, success in APIs depends on getting developers on side. To that end, the presence of cloud players in Open Gateway from day one is an important development since many developers already work with them.
MWC23 demonstrated the growing momentum behind network API monetization, but there is a long way to go to realize its potential. To execute on the opportunity, CSPs must focus on the developer experience, prioritize secure and monetizable APIs, and extend the Open Gateway initiative to more operators to maximize the base that developers can tap into.
Don’t miss Global Trends Shaping Telecom in the 5G Era, where you’ll hear a panel of experts cover even more of the industry’s most important topics. Watch it here.