IBM: Noha Sadek's 2016 Trends

2016 will be an exciting year for the telecommunications industry in emerging and developing markets, where several consumer and market trends are of concern, according to IBM’s Noha Sadek…

The telecom industry will face a considerable shift triggered by economic, political, technological, and social influences. Many service providers encounter multiple disruptive forces ranging from pressure to reduce costs and operational challenges to increased competition from over-the-top (OTT) players. In addition, they must investigate ways to cater to rising customer’s demands, address explosive growth in traffic, and contend with security concerns.

Telecom revenues coming from voice markets in developing countries are declining. On the other hand, emerging markets are driving global mobile data growth, especially in regions such as Southeast Asia, Latin America and Eastern Europe. Over the past year, mobile penetration in these regions has skyrocketed due to the increase in the availability of cheap and affordable smartphones. Additionally, the growth in mobile communication traffic volumes has been catalysed by OTT innovations. Following the success of Apple’s App Store, the substantial increase in application stores has stimulated the market for mobile applications.

Customers will continue to choose OTT alternatives (such as Facebook, Viber and WhatsApp), which poses a serious threat to service providers who are struggling to monetise these streams using their conventional business models. Customers have dramatically reduced their SMS and MMS usage by using alternative OTT messaging channels.  On the other hand, OTT applications, videos, and digital content services grow exponentially as a result of open access infrastructure.

To counter the OTT threat, service providers should leverage their access to huge amounts of customer data to either collaborate or compete with OTT players. Service providers are encouraged to invest in new capabilities such as analytics and big data to unlock the full value of data at their disposal. Analytics solutions adapted to developing markets can help companies create new services based on data about customers’ purchasing habits, lifestyles and behavioral patterns. Analytics enable service providers to rapidly assess opportunities and deliver new services to the market faster.

One other major trend that is expected to impact emerging markets is the rise of connected devices. The Internet of Things (IoT) will open a door to new opportunities for the telecom industry. The consumer side of IoT, rather than the industrial side, will be evolving in emerging markets. We will particularly witness a growing interest in the “connected home” sector.

To align with these trends, service providers are encouraged to transform themselves into a plethora of opportunities by leveraging new technologies like Analytics, Big Data, Cloud Computing, Mobile Computing and IoT. 2016 will see an increasing need for service providers and operators to learn about their customers, adopt new strategies and create new revenue streams.

Noha Sadek is a consultant and project manager at IBM.

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