The telecommunication industry is undoubtedly the cornerstone for digital revolution around the globe. Yet, some telecom companies fail to make the cut in attaining better profitability. Although large players in the telecommunications industry invest billions of dollars into networks, operations, and other telecommunications industry trends that make digital lifestyle possible for their customers, sometimes their performance can be inconsistent, resulting in poor service, dissatisfied customers, and declining profits. To overcome such situations, companies in this sector should not only keep abreast of the latest telecommunications industry trends, but they must also reimagine and reinvent how they operate in order to radically lower costs and deliver remarkably better customer experiences.
Telecommunications industry trends and market updates
Threat of new entrants
It is a known fact that that telecommunication sector is highly capital-intensive, making access to finance one of the biggest barriers to entry in this sector. Higher capital investments are a necessity to cover the high fixed cost for telecom operators. One of the most common telecommunications industry trends is that when the capital markets become more generous, there is an escalating threat of competitive entrants. On the other hand, there is a visible slowdown in the pace of new market entry when financing opportunities are less readily available. Furthermore, ownership of a telecom license can also represent a huge barrier to market entry. For instance, in the U.S., telecom operators must still apply to the Federal Communications Commission (FCC) to receive regulatory approval and licensing, making market entry difficult in the telecom industry.
Tug of war for 5G leadership
5G is one of the most awaited telecommunications industry trends right now. Over the past couple of months, there has been tremendous competition among China, Japan, South Korea, and the US for the first full 5G launch. Telecommunications industry trends like 5G come with tremendous benefits that go far beyond what we can do with 4G. The big answer everyone is waiting for now is ‘who will roll out 5G first?’. Top network operators around the globe are already gearing up to implement 5G technology. In the US, the Federal Communications Commission’s (FCC) Spectrum Frontiers Order has laid the groundwork for the use of 5G technology in the United States by the year 2020. Even China is in the process of making 5G technology commercially available in 2020. However, as the Chinese authorities control the implementation of the technology, the process may be slow.
Mergers and acquisitions
Online streaming platforms have made major strides in the last few years. Research shows that over 50% of young adults of the age group 18 to 29 resort to streaming services over satellite subscriptions or cable. As a result, companies in the telecommunication industry are forced to merge with or acquire streaming services and offer on-demand options to customers. Furthermore, cable replacement services such as Hulu Live TV, Sling, and YouTube TV are becoming popular hybrids. So, providers in the telecom industry are acquiring these content providers to join the bandwagon. Owning the content and increasing the profit margin is now one of the major telecommunications industry trends that top providers are already following.