If COVID-19 turned 2021 into a ‘difficult year’ for B2C telecommunications service providers, 2022 wasn’t much better. The unpredictable global geopolitical and economic backdrop, raging inflation, rising energy costs, and sharpened sustainability sensibilities make 2023 a challenging year to predict, says GlobalData.
The leading data and analytics company’s latest report on what to expect in 2023 from telco consumer services, platforms and devices, offers the following predictions on eight key categories for the year ahead:
In 2023, operators will continue driving forward on 5G network buildouts, both expanding their coverage areas and establishing spectrum depth where coverage exists, with an emphasis on supporting and leveraging holdings in 5G’s mid-band sweet spot.
Fixed wireless access (FWA), already an early consumer darling for 5G, will remain a point of emphasis. However, fiber deployments will continue apace, so the window for 5G FWA to maintain a disruptive presence could prove shorter-lived.
Like FWA, AR/VR/XR applications stand to see a significant boost to the consistency of users’ experience from the move to 5G SA, as the reduction in jitter and uniformly lower latency should alleviate some potential user frustration over uneven network performance, with applications demanding consistent data rates.
The smartphone market will see more eSIM-only phones from other original equipment manufacturers (OEMs), and Apple will expand its eSIM-only phones to regions outside the US. The market could also see some further sales channel challenge in the form of OEMs launching a subscription service for smartphones tied to hardware lease, most likely from Apple initially. Expect to see further wearable innovations with new health and fitness, pre-diagnostic, and safety features, as well as devices with unique use cases, such as voice recognition and automatic translation glasses.
As the mobile and fixed broadband markets mature, there will be an increasing focus on margins, multiservice upgrades, and free cash flow with less emphasis on raw single-line customer additions – formerly a competitive response priority for many.
Meanwhile, it is likely consumers will continue to weigh companies’ environmental and social equality credentials when deciding where to put their dollars. While being careful to avoid greenwashing allegations if their claims do not reflect reality, companies across the tech sector should continue striving toward targets such as the United Nations’ Sustainability Development Goals.
For several years, we’ve been watching the evolution of voice from an SA telephony service to a feature or enhancement of new digital experiences. Voice digital assistants are now a more common feature of telco e-care self-service and sales tools, and the race is now on to find the next killer voice feature or use case. OEMs could prove critical in bringing that to market.
Content & the metaverse
The key players in subscription video on demand (SVOD), photo sharing and microblogging will continue to experience user losses as younger Gen Z’s discover the charms of ‘the Fediverse’ of alternatives, such as BeReal or Mastodon. Meanwhile, we are predicting a consumer ‘metaverse winter’ in 2023 as investors and software developers start rethinking their former investment enthusiasm and scale back ambitions to specific, more easily monetizable XR use cases and partnerships, particularly with OEMs. This could be followed by a ‘Fediverse Spring’, as new platforms with a decentralized but connected multi-server proposition provide new experiences for social digital.
Telcos will lean on commerce offers to amplify their fixed and mobile integration. Support for microtransactions across a wide range of digital media will proliferate, while the limits of carrier billing will be pushed further into the realm of physical goods. Subscription aggregation across different consumer retail segments will be adopted by more telcos worldwide as they adopt the role of digital services value-added caretakers and gatekeepers.
Emma Mohr-McClune, Chief Analyst and Practice Lead Telecoms at GlobalData, comments: “The key takeaways from our research shows that operators will be challenged in 2023 to meet their profitability and ESG targets in the face of rising inflation and costs, as well as new aggression from D2C OEMs, disruptive broadband plays and decentralized content models. Apple and Samsung will look to sell more devices via their own channels, and this push could encompass everything from improved upgrade programs to an eSIM wireless service option menu out of the box to a full lease or rental ‘device-as-a-service’ program for consumers.”