Telecommunications has become one of the most competitive industries in Australia, and with the current financial climate expected to worsen before it improves it is more important than ever for telecommunication companies to stay on top of the current and emerging trends in the industry.
Global growth according to IMF’s latest forecast, The IMF forecast global growth of 3.1% in 2024, up two-tenths of a percentage point from its October forecast, and said it expected unchanged growth of 3.2% in 2025. The historical average for the 2000-2019 period was 3.8%.
Global trade was expected to expand by 3.3% in 2024 and 3.6% in 2025, well below the historical average of 4.9%, with gains weighed down by thousands of fresh trade restrictions.
The IMF's chief economist, Pierre-Olivier Gourinchas, said the global lender's updated World Economic Outlook showed that a "soft landing" was in sight, but overall growth and global trade still remained lower than the historical average. With disinflation and steady growth, the likelihood of a hard landing has receded, and risks to global growth are broadly balanced.
In any financial climate it is the Telco businesses delivering exceptional service and value for money that will ensure their future success through 2024 and into 2025. Telcos that can adapt to a forever moving landscape, forge cross-industrial partnerships, justify their expenses, make strategic investments in scalable technologies, and develop innovative solutions -especially for their B2B or B2B2X clients- may gain a significant edge over their competition in the coming years.
Too start back in 2024, we look at the trends, that are expected to drive change and innovation in the industry for the next decade.
5G hits it's stride, but what about 6G?
While 5G and 5G Internet has been around for several years (we've mentioned it in our predication wrap up for several years), it has yet to reach it's fullest potential. At the moment most telecommunications providers have offered 5G coverage in tandem with 4G utilising their existing infrastructure as they slowly ramp up their 5G network. Over the coming year as coverage extends we will begin to see standalone 5G service offerings, which will allow customers to take up the benefits offered by true 5G networks and allow the rollout of digital services offering greater security and stability than previously possible.
The anticipation is that 5G, especially "5G Standalone", will mature by 2024, particularly in markets where providers were quick to ramp up their 5G infrastructure early. 5G Standalone is anticipated to deliver on the promises made by 5G including; speeds 100 times faster than 4G LTE, lower latency for real-time applications, greater capacity, improved reliability crucial for applications like autonomous vehicles, enhanced flexibility fostering innovation, and diverse use cases such as IoT deployment, immersive VR/AR experiences, powerful AI applications, efficient cloud computing services, and the development of smart cities.
But what about 6G?
The next-gen tech (6G) will likely be 100 times faster than 5G. The benefits go far beyond speed, however. 6G will be a fully integrated system that allows for instantaneous communications between devices, consumers, and the surrounding environment. 6G-enabled enterprise technologies will transform the way companies process information, communicate, make decisions, and train employees.
Interestingly, several major telecommunications player, have started to talk about the need to move away from marketing 6G as a concept, instead choosing to focus on constant capability enhancement in the future. This shift reflects a promising trend, emphasising a move beyond talk about xGs and committing to bring better solutions faster.
In 2024, a surge in the deployment of such systems and satellite launches is anticipated to drive the integration of terrestrial and non-terrestrial components into cellular networks. This integration promises a more robust communication infrastructure, offering enhanced connectivity, improved reliability, increased bandwidth, and establishing communication networks with an asset-light, third-party model. Additionally, there are advantages to IoT and M2M connectivity, especially in rural or underdeveloped areas.
Having billions of IoT devices poses a significant operational challenge. To combat on-going security vulnerabilities, devices need constant updates and future 5G devices will require an efficient distribution of data on a global scale. With wide coverage and broadcast capabilities, satellites are well-positioned to support IoT. They can offer shared uplink connectivity for a massive amount of IoT devices and provide data aggregation.With an integrated satellite-terrestrial solution, the additional capacity can be used as an IoT backup or supplementing congested data traffic. This permits higher peak rates and more reliability in massive machine communication.
Satellite technology and its related product offering is expected to evolve rapidly and get much more affordable in the upcoming few years, with many use cases emerging for both consumers and businesses. In Q4 2024 PWN launched it's OneWeb powered LEO satellite communications product range, PWN can offer connectivity services designed specifically for regional Australia and even the most remote Australian enterprises and communities.
Focus on the consumer
With an increase in competition comes a strong need for telcos to differentiate themselves in the marketplace. Over the last decade we have seen a shift from "cheapest plans win" through to a more sustainable focus on on customer service and product offering. While service bundling was once the domain of Tier 1 telcos, as service platforms have evolved bundling strategies have since found their way into smaller telcos and other service providers in aligned industries like insurance, electricity & other utilities.
Bundling strategies of telcos are increasingly focused on digital services with management of multiple subscriptions seen as the driver to expand revenues and serving the digital way of life. Telcos are introducing various digital services (e.g. gaming, health and fitness, utilities, insurance, smart home, etc.) to complement traditional bundles alongside more customization and choice.
The driving force behind loyalty has shifted, and it is now centered around ease. Today, customers value seamless purchasing and convenience. As they become accustomed to exceptional journeys and experiences through e-commerce and grocery apps, their expectations extend to other service providers as well. Telcos also have opportunity to position themselves in the provision of other digital services including CRM, Marketing Platforms, Invoicing instead of approaching individual SAAS providers.
Cloud computing is not a new concept, but in many businesses the willingness to deploy new IT solutions hinges on many outside factors. It is often only in necessity that businesses will make the switch. Over the past few years cloud computing has become normalised and at the point legacy systems are retired, businesses are now looking at what options they have. Telecommunication providers offering cloud solutions can help their customers improve scalability and respond more effectively to demand fluctuations. One of the biggest benefits to the telco market is how quickly new products & services can be taken to market, and without the requirement for huge investments into traditional architecture and infrastructure, niche products can be added to your product suite with much less risk.
AI-assisted technology in the market
It is no secret that one of the biggest areas of conversation in business over the past 18 months has been around the topic of AI Technology and how it can be implemented in business to improve customer outcomes. According to a survey by Altman Solon, generative AI spending could surge as much as six times the current amount for telcos, and use cases will reach an average of 34% adoption among communication service providers (CSP) within the next year, reaching 48% adoption within the next two years.
As telcos find themselves in an increasingly competitive industry we are seeing a bigger need for them to deliver best-in-class customer service. As AI-enabled predictive technology has matured, telcos are now starting to use AI-enabled predictive behaviour analysis to automate CRM, improve personalisation, provide better customer segmentation and predict which customers are more likely to churn in the near future. AI technology is in the market to enable telecom companies to predict customer inquiry volume and types, so they can respond with groundbreaking efficiency while providing more accurate troubleshooting and technical support. The use of chatbots and virtual customer assistants will also make telecommunications news as companies implement them to help provide better self-service support tools while improving response times, reducing customer support costs, and providing better service.
Telcos are in the first phase of generative AI usage, where solutions such as call summarizations or chatbots that augment existing systems allow for rapid implementation and adoption. Customer-facing chatbots are the most widely adopted use case for generative AI in the telco industry, with 92% of CSPs highly likely to implement chatbots, and 63% of those stating they already have one in production.
As AI matures even further we’ll see a keen focus on integrating the customer experience with generative AI even more closely, in the form of personalised products and marketing to create new value opportunities.
In addition to helping telecom companies improve their customer service, AI algorithms will be used in combination with machine learning to help telecom companies provide better service and performance. Future-looking companies will use this powerful duo to optimize their network traffic by predicting usage patterns, and adapting and reconfiguring networks to respond to fluctuating usage demands. In addition to significant energy-cost savings from scaling back availability during non-peak times, this combination stands to improve the reliability of connectivity by monitoring performance and detecting anomalies to help companies perform preventive and predictive maintenance and make more informed decisions regarding resource allocation. Some companies will also use AI to detect and self-repair network issues, and others will use it to nip fraudulent activity in the bud by detecting security breaches such as unauthorized network access or service theft via stolen passwords and user profiles.
Increased cyber-attacks and data breaches, leading to better cyber security
Cybersecurity has been top-of-mind in the industry for years particularly with the number of high profile data breaches making the mainstream media, and it will continue to be one of the dominant trends in IT & telco industry in 2024. Some experts predict that we’ve only seen the tip of the iceberg when it comes to cyber-attacks and data breaches, expecting that the proliferation of 5G will usher in a new era of security threats from hackers, corporate espionage, and uneducated users (e.g., poor password management).
We've seen that Telcos are particularly vulnerable to cyber-attacks because of the breadth of sensitive data they are required to store; including credit card information, credit management, personal details etc. In order to protect their reputations and avoid litigation, businesses will have to ramp up their cyber security efforts. Savvy companies will amp up their threat detection along with their incident response methods and prevention measures.
In summary, the telecommunications industry in 2024 will be navigating through transformative trends and challenges. The impact of global economic conditions, especially in the wake of a weaker outlook and various uncertainties, will heavily influence telco strategies. AI, Large Language Models, and machine learning present both opportunities and challenges. Sustainability and Environmental, Social, and Governance (ESG) considerations emerge as critical factors, requiring telcos to balance societal expectations and business innovations. The changes in the business landscape we have seen over the past 5 years presents an opportunity—and a challenge—for many businesses to build the competences previous lacking: to be more digital, data-driven, and in the cloud; to have more variable cost structures, agile operations and automation; to create stronger capabilities in e-commerce and security. Partner Wholesale Networks provides a complete telecommunication product ecosystem to help your customers face challenges and grow their businesses. If you would like to find out more about the benefits of partnering with us, contact Graeme Kelly on 1800 701 138