Jumping into 2023, we are facing another year of opportunities and challenges. As one of the most dynamic and biggest sectors of society, telecommunications is on the verge of new paradigm shifts and trends. With the previous year’s aggressive push for more connectivity, partnerships and digital services, let’s have a glimpse at what lies ahead — the good and the bad.
In the modern, digital world, the telecom industry plays a crucial role in fulfilling digital transformation goals across verticals. Evolving from a more traditional environment, the requisite tools and techniques have changed to respond to situational demands and customer behaviors.
What to Look Forward To
The telecom industry has undergone a massive transformation since the introduction of telephones and the first SMS until today’s mostly cloud- and digital-based interactions and operations. This fundamental transition of the connectivity industry is deemed to be never-ending to be able to meet new customer demands, competitive dynamics and emerging business models.
To keep the world connected in a secure and stable manner, here are some of the forward-looking trends and principles that should be met, followed and accelerated from 2023 onwards:
- Network expectations for next-generation use cases: Whether for enterprises, consumers or other industry partners, a telco’s network is expected to deliver low latency, high capacity and a consistent, trusted, adaptable and standard-compliant connection. Carriers must work to meet all network expectations for 5G adoption, cloud deployment and other Industry 4.0 use cases.
- 5G and fiber infrastructure investments: The 5G cycle is booming worldwide, with many CSPs starting to invest more in 5G standalone (SA) and continuing to invest in 5G infrastructure. According to the Ookla 5G Map, there were 127,509 5G deployments in 128 countries as of November 2022, and 5G download speeds stabilized with a median global 5G download speed of 168.27 Mbps in Q3 2022. In addition, Omdia estimated that over 20 operators globally have launched 5G SA networks commercially. It is likely that in 2023, these numbers will grow significantly. Along with high speed, there is deemed to be a big focus on the Quality of Experience (QoE) and initiatives to increase ARPU (average revenue per user) and customer retention by next year.
Fiber networks were once regarded as a high-risk asset class, but investment in fiber infrastructure is on the rise, with Omdia forecasting that by 2023, 95% of the broadband investment will be in FTTH. Fiber is a fast-growing infrastructure asset class that is gaining attention, as the deployment of high-frequency 4G and 5G spectrum needs a fiber backhaul. Thus, telcos’ ambitions of increasing FTTH penetration for residences, buildings and enterprise customers will boost the demand for fiber layouts. EY highlighted Wi-Fi 6, 10G PON, terabit ethernet and flexible optical service units as technological advancements that would empower progressive fiber network upgrades. The importance of fiber connectivity to sustain the level of data growth has become paramount, and larger bandwidths, along with reduced latency, jitter and packet loss, can be achieved with the incorporation of these fiber-enhancing technologies.
- Cloud momentum: A hybrid, multi- and hyperscale cloud has gained tremendous support because operators and enterprises are aiming to generate efficiencies, operate more cost-effectively and make a return on their investments. In 2023, we can expect more operators to move their workloads into the cloud, with more enhancements underway for BSS/OSS. Hyperscalers, such as AWS, will not only host telco workloads but also launch more connectivity products and services.
From a regional perspective, the adoption of a hyperscale data center would enable UAE technology partners to be part of a global partner network and generate more revenue by serving customers worldwide. Having said that, telcos will thrive with the cloud through robust partner support that could assist them in successful cloud deployments, both for setup and optimization. The use of SaaS deployment models is also anticipated in the telecom industry in 2023, with operators using SDN and cloud-native IP networking technologies. More so, utilizing renewable power would further reduce the carbon footprint of workloads in the cloud.
- Automation and immersive experiences: The age of automation of telecom infrastructures is here, and we will see further advancements in that domain in 2023. Telcos have a multitude of data — from external and internal sources. Much of it is scattered and siloed, making data harder to consolidate, govern and protect. Leveraging analytics tools and enabling intelligent automation would drive this process to increase revenues and enhance the user experience.
With the metaverse being one of the hottest topics being explored by telcos, we can expect to see more operators getting involved with businesses adopting VR and AR applications. The use cases for these technologies are vast, and they are a good opportunity to stay ahead of the competition. Training, employee onboarding and hybrid workforce experiences can be transformed by delivery via the metaverse. Operators will also need to use modular components that can be modified independently to avoid disruptions and adopt standardized interfaces. When put to best use, AI/ML and intelligent automation can optimize the distribution of work across telcos, monitor their networks and automate operations for better business continuity and resilience.
- Environmental sustainability: We’ve seen sustainability emerge among telcos’ priorities in 2022. A lot of agreements and initiatives were launched, both regionally and globally, to fight climate change and ensure that telcos’ networks and operations are contributing to making the world a sustainable place. This is set to continue in 2023, with telcos expected to deliver on their sustainability commitments in time. It’s not an overnight job, which is why the industry is bound to act in a more eco-friendly manner.
Current and Emerging Risks
As with any other technology-powered industry, risks are part of the journey. With inflation, the geopolitical scenario and other societal pressures surrounding the industry, telecom players must brace themselves for a challenging 2023 landscape. The demand is obviously there, but fulfilling the requirements would oblige a systematic and feasible plan altogether.
EY has identified the top risks across the sector and shared some views on how to mitigate them. Some of the most important ones are anticipating growing cyber threats, rebalancing talents, managing partnerships, ensuring network reliability, maximizing infrastructure assets and adapting to regulatory changes.
Given the fast pace at which digital technologies are being integrated within the telecom industry, the digital infrastructure must be protected, no matter where it resides. In 2023, there should be heightened preparation and response for cybersecurity requirements. This can include data collection, storage, processing and traffic flow implementing zero-trust architectures to address cyber threats at all levels.
Remote work culture is being considered by many employees, and with better collaborative tools, communication and skills enhancement can be encouraged within a telco workplace. A recent initiative to enhance the skillsets of employees and accelerate efforts to drive talent development in the UAE involved Nokia holding training and development programs that covered technology competence and knowledge transfer to du employees.
Solidifying partnerships is indeed key to holistic industrial growth, as no single company has what it takes to deliver all products and solutions to customers. Within 2023, we are yet to see more collaboration between telcos, hyperscalers, system integrators, towercos and other ICT players. The risk of harmonizing and garnering desirable results should be handled accordingly.
Maximizing infrastructure assets and adapting to new regulations would indirectly impact network reliability. In this case, telcos are expected to plan out their investments for the greater good by weighing the pros and cons. Reaching out to rural areas, expanding fiber networks and engaging with the right verticals and spectrum, among other factors, must be taken into account.
Overall, we see an exciting — and unstoppable — year ahead for the telecom industry, filled with innovation and cooperation among players, resulting in new offerings and propositions for end-users.