The telecom industry globally is a critical economic multiplier, and is the base of all new-age communications and connectivity. The Indian telecom sector, by far, is the world’s second-largest telecommunications market with a subscriber base of 1.16 billion – the second-largest market in terms of the number of app downloads – and there are around 840 million internet users counting to 60 percent of population.
India’s telecom journey has moved paces away from the first telegraph communication set up in Kolkata, and is on a dizzying trajectory toward digitization. Further reforms in telecom regulations will propel the future of Digital India to greater heights.
At the very outset, the government’s focus was on communication technology (CT), which marked the first wave of the information era. The second phase was the internet phase which started approximately around the year 2000. The industry realigned itself around horizontal solutions during this phase. It was the time of e-commerce and portals.
After 2006, the cloud began taking shape and this marked the third phase of transformation in the telecommunication industry. Come 2023, and we are in the midst of the era of cloud, where a new world of opportunities has opened up for the carriers. It is quite evident that this era is unstoppable and there is no escape.
Since the early 2000s, the industry has seen rapid innovation and deregulation. The telecommunication sector has evolved into a much more decentralized market from just a few key players.
The telecommunication market consists of primarily the residential and commercial segments. Out of these, the residential segment controls up to 62 percent of the market. However, the commercial segment also expects growth at a much faster CAGR due to increasing internet penetration and the rising adoption of mobile devices. Many telecom firms integrate emerging technologies, such as AI and IoT, into their services to capitalize on the growing market.
5G wireless technologies have potential capabilities and will play a crucial role in shaping the future of telecom. Enterprises and companies will enter an era of accelerated innovation, growth, and collaboration and growth, enabled by 5G deployments and telco solutions.
The telecommunication sector is currently in a transformational state due to the changing customer demands and the inception of multiple disruptive technologies. The increasing competition has led telecom operators to explore new competitive strategies to gain the upper hand in the market. A few digital transformation trends are driving innovation for telcos. Like every other industry, the telecom industry is experiencing a digital shift. In fact, with the advent of the pandemic, there is an acceleration in embracing technologies like AI, IoT, 5G network, etc. In this regard, let us look at the trends that are leading this transformation for the telecom industry in India for 2023.
5G network – The network of today and tomorrow
While earlier cellular technology generations concentrated on guaranteeing connectivity, 5G takes connectivity to the next level by providing connected experiences to customers via the cloud. Cloud technologies are utilized by 5G networks, which are virtualized and software driven. Additionally, it enhances digital experiences through the use of machine learning-enabled automation. 5G networks are extensively used in education, healthcare, and transportation settings due to their superfast data transfer and low latency. Telecom operators can leverage Wi-Fi 6 for developing new ways to optimize traffic across access networks. Moreover, when merged with 5G technology, Wi-Fi 6 will provide enhanced signal strength to enable IoT deployment and support always-on devices. Ramping up the 5G rollout needs significant investment. Operators are expected to invest USD 10 billion in 2023-24. We expect to see more frequent tariff hikes in 2023, which will boost ARPU. India’s current ARPU of USD 2.5 is significantly lower than the global USD 7.5. India’s ARPU needs to be doubled in the long term for the sector’s sustainability. 5G network will kick-start the next wave of innovations in the telecom industry, while enabling near-zero communication latency, wherein communications will occur in real time without any delay.
Artificial intelligence and big data
The telecom industry is very well recognizing the value of existing data and making use of the same. This is where AI and its software step in to help process and analyze large amounts of data to make the service more efficient. For instance, AI-enabled virtual assistants or chatbots help customers how to install apps and operate the same. AI tools help to personalize user experience and improve customer satisfaction. A recent market report also highlights that the global AI in the telecommunication market is to reach USD 9267 million by 2027 growing at a CAGR of 46 percent. In future, these technologies would be a game-changer for achieving scalability and security demanded by 5G and the Internet of Things (IoT).
The network is going to play a major role in the development of smart cities. These cities will also primarily depend on telecommunication networks to receive actionable insights from real-time data. Understanding the pivotal role of connectivity in a smart city ecosystem, we can easily see several critical ways in which telecom companies can empower a smart city. Telecom companies can provide the connectivity that city governments require to become smart. Smart city solutions can be anything from lighting to traffic, from air quality to government performance. Telecom companies can serve as a bridge between the city government and the wider community while providing a one-stop shop for city data.
Internet of Things
The Internet of Things (IoT) has transformed the role of telecom service providers in enabling communication between people and devices. The adoption of IoT helps the telecom industry to monitor base stations and data centers remotely. This ensures minimal downtime for the network, enhances business procedures, and generates more revenue.
Telecom industries are developing innovative methods and applications to monetize IoT solutions. They can benefit from these emerging technologies and reposition themselves as IoT leaders, offering services beyond network connectivity. CSPs can also explore new opportunities and develop an extensive array of services for a vast range of industries, from manufacturing to healthcare.
Berg Insight, a dedicated IoT analyst company, predicts there will be 4.15 billion IoT devices connected to cellular networks globally by 2024, which means vast opportunities for telecom operators. One of the most promising niches is IoT in home automation that provides exceptional mobile and network services to smart home mobile apps and real-time monitoring systems.
The telecom cloud market was valued at USD 25.33 billion in 2020 and is projected to reach USD 74.36 billion by 2026, according to the Mordor Intelligence report. So in the next few years, we are all going to witness a massive shift of communication service providers (CSPs) to the cloud.
There is a rise in cloud-based communication in the country. Most telecom providers rely on a large computing infrastructure to deliver a diverse set of applications, manage data, and bill services. Migrating to the cloud reduces internal computing resource needs as well as the internal cost, and increases revenue streams.
The pay-per-use service model helps telecoms to introduce new services, reduce the cost of the service, and work more effectively as per the market demands. Adopting cloud technology will help them in terms of their scalability, agility, and cost efficiency. Plus, integrating or moving to a cloud-based setup will also allow telecom companies to grow their service portfolio and expand overseas at the speed that today’s market requires.
Telecommunication businesses stand to benefit greatly from developments in artificial intelligence. They are already using AI technology, such as virtual assistants, chatbots, and AI tools to personalize user experience and improve customer satisfaction. It has an unmatched ability to process and analyze an enormous amount of data without risking security.
The number of operators investing in AI systems to improve their infrastructure is expected to grow to 70 percent in 2025. AI provides new ways to optimize network maintenance, predictive maintenance, and customer service costs. It allows operators to prepare personalized offers for their B2C and B2B customers.
AI also detects problems in the network, allows self-healing, and protects networks from any fraudulent activities. It also helps operators to monitor the start of equipment and anticipate failure, based on patterns. In short, AI will enable better root-cause analysis to efficiently deal with emerging hardware issues.
Robotic process automation (RPA)
The telecommunication industry has one of the highest adoption rates for RPA technology. It offers high levels of scalability and agility as it takes over the repetitive and rule-based tasks or processes, such as responding to customer queries, report generation, price tracking, etc., and completing them accurately.
It provides the company with the right power and tools to easily manage back-office work, such as maintaining data integrity and security, employee salaries, marketing and advertising, and hardware and software costs.
This gives time to employees to work on rather crucial tasks, develop deeper customer relationships, increase operational efficiency, and troubleshoot the delays in the service delivery to the customer.
The telecommunication sector is one of the most vulnerable sectors when it comes to cyber security. With telecom companies having large customer bases, there are abundant opportunities for malicious attacks to gain unauthorized access to their data.
When a major telecom service provider infrastructure is under attack, the consequence could potentially affect a whole country, businesses, consumers, and the government agency. It also has major ramifications over the telecom brand’s reputation and trustworthiness.
By adopting a holistic approach, such as cyber security mesh, the telecom providers are better able to detect threats, take up prevention measures, and support resilience when attacked. The mesh takes a more modular approach instead of securing a single IT perimeter as networks do not have physical borders.
Soon cybersecurity mesh will emerge as a mainstream approach as it adheres to the zero-trust network concept – meaning, any connection used to extract data will be considered unreliable until the security protocol verifies it. Moreover, the mesh promises to treat all data systems and equipment similarly and securely, irrespective of their location within or outside of the network.
The key advantages of embracing these emerging technologies include operational agility, improved data security, enhanced customer experience, and so on. These technologies are even giving birth to new business models. Business efficiency is another area where digital transformation plays a pivotal role, and organizations can provide consumers with personalized and on-demand products/services more than ever before. The global digital transformation market size is expected to reach more than USD 1 trillion by 2025 Hence, it is a clear indication that digital transformation is the need of the hour for organizations, big or small. Although the telecom sector in India has struggled with restrictions and policy disruptions for long, the reforms taken up by the government now point toward a new era of healthy growth.