The path to building a truly connected world is closely intertwined with transformation in the telecommunications industry. New technologies, together with global efforts to connect previously unconnected populations, are enabling growth for telcos and mobile network operators (MNOs) across the world.
We asked Mihai Oancea, senior strategy and market intelligence analyst at SES, to expand on the key drivers of change in the industry.
What are some of the major trends in the telecommunications industry?
In the telecommunications space, 5G proliferation is the most significant trend going forward. Today, there are 5G deployments on each continent, with approximately 175 commercial 5G networks deployed globally. As with every new generation of wireless technology, 5G will improve the delivery of mobile broadband services. However, in contrast to previous generations, 5G is also expected to support a wide array of new digital capabilities—including the cloud and edge computing, Internet of Things (IoT), augmented reality (AR), and virtual reality (VR).
Another important element impacting the telecommunications industry is the growing number of digital access programmes implemented globally. The COVID-19 pandemic has re-emphasised the value of connectivity and the need to bridge the digital divide. Consequently, telcos and MNOs are required to accelerate the rollout of services to meet universal service obligations (USO) in the regions they serve.
How will 5G, and the technologies it enables, impact enterprise customers?
5G will be a core element of digitalisation across numerous industries. In comparison to 4G networks, 5G can deliver up to 10 times the speed, while vastly lowering the latency. This means it can, for example, enhance machine-to-machine communications to optimise operations at manufacturing facilities. Facilitate VR-enabled medical training in the healthcare industry. And connect thousands of IoT sensors to enable the automated mine. Imagine a fully digitalised mine that can be fully controlled remotely from a centralised operations centre—including drill control, the dispatch of trucks in a pit, train control, and port control. All of this will be made possible using a 5G network. In the manufacturing industry alone, 5G is expected to bring around USD 740 billion in benefits by 2030.
Enterprises today are increasingly looking to leverage private wireless networks at their facilities. According to GMSA, around 25% to 40% of small and medium enterprises are expected to be served by private mobile networks between 2023 and 2025. This represents a huge opportunity for the telecommunications industry—defining and rolling out 5G-based private networking platforms and services can help telcos and MNOs maximise their return on investment.
What challenges do telcos and MNOs face in bringing 5G services to customers?
While 5G brings huge performance advantages to enterprise customers, its perceived benefits over 4G are not as clear for individual end users. A typical mobile user is unwilling to pay for 5G since their 4G network already provides the connectivity they require—whether to browse the internet, stream content, or connect with friends on social media. This makes it difficult for telcos and MNOs to monetise 5G services for the consumer market today.
In the future, however, the introduction of more connected home devices and AR and VR applications is expected to strengthen the case for 5G in the consumer market.
How is the need for digital inclusion shaping the telecommunications industry?
Globally, connectivity is increasingly recognised as a basic human right. More than 164 countries have introduced digital inclusion initiatives to connect the unconnected.
In developed countries such as the UK, for example, broadband services are required to deliver download speeds of at least 10Mbps across the country. In the US, the Rural Digital Opportunity Fund will facilitate the delivery of broadband services to 5.2 million locations nationwide by 2030. Developing economies are equally invested in bridging the digital divide. India, for example, has the world’s largest rural connectivity programme, which aims to provide a minimum of 100Mbps broadband connectivity to the country’s 250,000 village councils. And Colombia’s rural connectivity programme plans to bring free, high-speed internet to 10,000 population centres in the country.
For telcos and MNOs, meeting USOs is a requirement. Yet, it’s not always economically viable to extend networks to rural areas—some regions are difficult to reach via terrestrial fibre due to the terrain, and others are sparsely populated, providing little or no return on investment. Satellite connectivity plays a huge role in helping telcos and MNOs meet USOs while maintaining profitability.
How is SES supporting the telecommunications industry as it evolves?
Reliable, high-availability, and high-performance satellites are crucial to enabling transformation in the telecommunications industry. At SES, we’re working closely with industry-leading telcos and MNOs to define and deliver fibre-like satellite connectivity services that help them capitalise on new technologies and maximise return on investment. Delivering cloud-grade services, for example, represents a huge opportunity for telcos and MNOs. According to a Gartner report, 55% of all enterprise workloads will be in the public cloud by 2022, and the global public cloud market is expected to reach USD 482.1 billion. At SES, we’re partnering with the world’s leading cloud service providers to provide one-hop connectivity to the cloud, so our customers can keep up with cloud adoption trends in the market.
Our end-to-end managed services for mobile backhaul enable seamless network expansion for telcos and MNOs, allowing them to reach new subscribers in difficult to reach regions, meet USOs cost-efficiently, and connect remote industries to 5G services.