The pandemic proved to be a bit of a detriment to the global telecom market. The market overall contract by 2.5% in the opening days of the pandemic, primarily in the roaming, prepaid, and business services industries. This was a concerning trend that quickly reversed itself and the market is currently forecasted to catch up to pre-pandemic levels and then to exceed them.
If you work in the global telecom space and you have been watching the trends, you have probably seen that things are on the move and they are headed in a positive direction! There are some key changes that are going to help the global telecom market do big things in 2021 and beyond, and we will discuss them in this article.
If you are ready to learn more about the state of the global telecom market in 2021, read on for more information about all of the changes and improvements that are headed to consumers and business owners by the close of 2021.
What is the Global Telecom Market?
The telecommunication services industry includes fixed-network services along with mobile and wireless services. This is a trillion-dollar market that is comprised of many moving parts and it is a space that has enjoyed a steady increase in value for the past ten years if you discount the small decrease in the market’s overall value during the first six months of the pandemic.
This is an industry that is dominated by large players with high-value brands like AT&T and other global businesses with control over huge portions of this market space. The increasingly global nature of this market means that there is really no limit to the potential for telecom and the current recovery shows just how strong this market space is.
Telecom trends are being influenced by companion industries and technologies in new ways, and the changing reality of working and playing in the global marketplace is pushing forward technologies that were at a slow simmer for many years. This a time of unprecedented change and development in the telecom space, and trying to keep up with these changes requires an almost daily reassessment of this market space.
An accompanying shift in the focus of telecom tech development has also seen new players in the market taking up new positions of supremacy that would not have been possible without the changes that have resulted from the pandemic and its lingering effects on daily life.
Current Factors That Are Driving Value Up
The shift to working from home was a huge boon to the overall value of the telecom industry. Rising demand for high-speed internet and other internet infrastructure improvements like 5G helped to push the contracting market out into new areas. This was already a trend that was beginning to make itself known as a large portion of daily online activities was beginning to shift toward cell phones.
Mobile subscribers are on the rise, which has made a good pairing with the shift to high-speed internet in many homes. Between changes to teaching and working realities that have led to many devices needing to be connected to the internet at the same time and developments in entertainment mediums like VR and other kinds of more immersive gameplay, premium high-speed internet is almost a must in most homes these days. While there is the chance that some of this demand could slump post-pandemic, consumers are unlikely to want to revert back to slower internet and lesser streaming capabilities even if they do go back to the office for their daily work tasks.
Monthly data traffic in the US is currently at 33 million exabytes. This is an 18% growth when compared to 2019-2020 data. This is a major driver for the telecom market rebounding in 2021, and a welcome change of pace after the slowdown in early 2020. As internet speeds increase worldwide, the industry will begin to encompass more and more market space due to necessary support models to make this possible for users.
Changes That Are Taking Place in the Global Telecom Industry
As this industry space expands, there are some necessary changes that are taking place. Most major players are leveraging three key strategic changes to keep up with the changes that are taking place in the wider industry.
1. Renewed Focus on Customer Needs
Customer engagement is changing in many industries as remote work and remote schooling have become the new norm. People are increasingly required to work with one another on customer service items long-distance through remote channels. This can mean leveraging AI, chatbots, and a whole host of other tools that improve customer experience.
Customer engagement is also being improved through increased use of social media outreach and added value offerings like tutorials or other outreach to teach and train users. This is a necessary adjustment that the global telecom industry is going to have to continue to work on as internet speeds and internet demand continues to increase around the world.
2. Streamlining Entertainment
As we have already mentioned, people are at home a lot these days. The demand for quality entertainment that streams quickly and reliably has never been higher. Telecom companies are ramping up solutions to offer and provide improved streaming for all kinds of media that are being offered to their customers.
These changes will also require leveraging new strategies to enable them to meet these demands with agility. No more stagnant models that do not fulfill changing needs quickly and with authority! This is a changing space and telecom improvements and updates are happening nearly every week right now. The process of change and flux may slow some as the “new normal” goes into effect later in this year, but for now, being nimble and open to change is a huge part of handling the increased demand that the telecom industry is experiencing.
This part of the strategy that is being deployed is attention to monetizing wireless networks via new products and services and business models. This part of the plan works hand in hand with streamlining the entertainment process and other forms of streaming services, but it is by no means the only area of focus. This repositioning will mean many things in many different aspects of the telecom industry.
For internet services, it might include changes to the charges and offerings for speeds and other kinds of package details. There might also be changed in the way that hotspots and other necessary remote use technologies are offered and supported. Lastly, there may be changes to the charges and fees associated with supporting businesses who are now working fully remote and need increased internet speeds and other necessary infrastructure to keep their daily work processes smooth and simple.
How Will the Pandemic Affect the Telecom Industry?
The pandemic has stretched on for many more months than anyone ever expected it to. This has led to a lot more questions than answers, and one of the questions that have been asked frequently is if the burgeoning support structures for online work and entertainment will necessarily contract again when the pandemic “ends”.
The biggest question about the stability of this increase in global telecom markets is if the bandwidth that is being demanded right now will continue to be in demand at the close of the lockdowns and other pandemic features that have created the need for this increase. The reality is that no one really knows what will happen as 2021 progresses. There are more questions than answers right now.
As a result of the lack of information that is currently the norm, telecom companies are going to have to continue to meet rising demand with the hope that this demand will continue to be necessary later when people may go back to work full time in the office and children will go back to school in person. However, it should be noted that there will be a “new normal” that rises from this period of change and the likelihood that the current infrastructure that is being built for increased internet speeds and increased demands will likely remain useful to daily business functions and other daily needs.
Companies can choose to hold off on doing the necessary changes to keep up with demand, but they would be risking falling behind other competitors and being closed out of markets they want to retain their position in. There is no easy solution to this conundrum, but there is promise in rebranding and retooling the kinds of models that have previously driven customer loyalty to create an ongoing need for increased bandwidth and other benefits that have come from the pandemic reality.
The bottom line is that most consumers will never want to backtrack to slower internet or less access to internet functionality in their homes post-pandemic. Likewise, the improvements that are being made to the entertainment streaming options available to consumers will make them unlikely to want to drop back to slower or less immersive models after things become “normal” again. Consumers like improvements to their products and services, and they are not typically motivated to downgrade technology in their homes once they have experienced the improved versions of these daily conveniences and work necessities.
Deployment of 5G and How it Will Change the Next Decade
The biggest change and also the one that is likely to have the most long-term impact is the deployment of widespread 5G. This has been a plan that many telecom companies had in mind before the pandemic, but like so many technological improvements that were pressed to the front of the line by the pandemic, 5G deployment has become a priority for many companies at this time.
There is a lot of evidence that suggests that first adopters will benefit the most over the next decade. This is due to the historical link between macroeconomic benefits and early adoptions of technological advances. A good example of this connection at work is the adoption of 4G by the US early on in the development of the technology. This led to the US enjoying a larger advantage related to future 4G growth thereafter.
The adoption of 5G will allow early entrants to this space to set the tone and the direction of the coming wave of 5G developments and improvements. Because 5G has been creeping in slowly to this point, there are many large players in the telecom space who have not invested enough effort in its development. This will come home to roost now as China continues to outspend many other countries in this area of technological development.
China, Japan, and South Korea are set to create their own definition of 5G and that will necessarily force all other major players in the market to simply follow their lead for the rest of the decade. This is a troubling indicator of the work that does need to be done in other countries related to 5G in the coming months. Being behind the 8-ball for the next decade until a better mousetrap is invented is not a position that any serious player in the telecom industry should be willing accept.
There was a brief moment where another company could have stepped in to take over Japan and China’s supremacy in the 5G race, but that moment was in the middle of 2020 and has long since passed. The discussion of the US working with Japan to create a bonded 5G project also fell flat when it was discovered that their two unique telecommunications infrastructures were not compatible enough to make such a working relationship pragmatic.
At the end of the day, each country that wants to leverage 5G to grab up a significant part of that market space, will have to do so soon and with authority. There is unlikely to be any major player in this race who will want to work with another country at this point in time, so the drive to create and redefine the 5G space will need to be done with fully internal resources and effort.
Tax Changes That Will Alter the Landscape in 2021
Another area of unprecedented change is the tax structure for some major players. Speaking to the US, tax reform is happening in key areas. There will be a hefty tax cut for media and entertainment companies from 35% to 21%. This can make a huge alteration to the demands of telecom in these spaces as smaller companies use these tax cuts to help grow their demand and customer base.
Tax Changes in the UK in 2020 that are extending into 2022, have led to alterations of companion rules and industry standards. Locked devices have been banned, accessibility rules were adjusted and improved, and bundling regulations were altered. Many of the tax changes are related to Brexit and a shift away from the EU, so these changes could crop up consistently in the coming tax years.
Tax changes are always a factor in the development of new technologies and expanding market spaces. The fact that tax changes in the telecom industry are keeping pace with the times is unique to this market growth, and it should be a point of attention for any company seeking to keep up with the changes. Tax changes can make or break investments into technologies and market spaces, and being informed and up to date can help companies to commit development dollars to the right parts of their upcoming technologies.
What Do All of The Changes Mean for the Global Telecom Industry in 2021?
There are many internal changes that will continue to happen within the global telecom industry over the coming year. From the competition for 5G deployment supremacy to other changes that are native to specific demands in each country, there are many changes on the horizon for those working in the global telecom industry.
One of the most interesting changes that are slated for some level of deployment by the end of 2021, is the increased bond between AI tech and telecom tech. AI is becoming an increasing presence in daily life, from chatbots that provide customer support to instances of AI working behind the scenes in security processes and cloud computing. The bond between AI and telecom has yet to fully gel, but the connection shows definite usefulness related to more efficient bandwidth use, network visibility, and lower costs for an increased level of services.
An interesting side effect of the increase in 5G services globally, is that concerns about 5G harming the health of those who use it for their devices have been largely debunked. This may have been one of the remaining barriers to full implementation, and it has been swept aside by the larger pool of research that is now possible with so many people using 5G on a daily basis. Recent studies have shown “no measurable detrimental effect” of 5G exposure.
Telecom has also become increasingly bonded with new developments in VR, AR, and MR tech. Collectively referred to as XR, these technologies are being increasingly used for infrastructure, industrial, and logistics maintenance. Telecom is one of the industries where XR is highly useful and relevant, and XR tech is being adopted and developed for business use. The biggest focus of the pilot programs developing these technologies is to make sure that XR can be used for training and for troubleshooting issues within networks or with technology.
Advances in TV technology got a bump during the pandemic, and this rise in sales and interest in new and better TV tech has not slowed as of yet. The market for 8k TVs is expected to reach the one million mark in 2021 in the US. It will be interesting to track the effect that new interest in 8k TVs will have on telecom offerings for entertainment and streaming services. There is no real benefit to an 8k TV without quality streaming services that can allow its use, but as the tech becomes increasingly adopted, changes in overall entertainment offerings and streaming services may become mandatory for large players in the telecom industry.
Telecom industry growth related to cloud infrastructure has not slowed at all, even during the opening months of the pandemic. This increased attention to this need is not expected to show any signs of slow down and should ramp up to an increase of more than 30% in 2021 when compared to 2019 numbers. The only possible hindrance to this projected growth would be a steady decline in remote work after the pandemic is over, but current projections indicate that cloud adoption is so much more effective than other models that it will not become obsolete, even at the end of the pandemic.
The Global Telecom Market is Well On its Way to a Great 2021
The balance of demand and technological growth has caused unprecedented improvement in the global telecom market at the beginning of 2021. It is rare for a market space to recover this quickly after a slump, but the pressures of remote work, increased time spent at home, and a variety of smaller market pressures from consumers have led to a rebound in the telecom industry that should carry through the end of 2021.
Change is the name of the game, and those who are attempting to stay abreast of the improvements and alterations to the global telecom reality will find that nimbleness and willingness to adjust to unexpected windfalls are going to be necessary. There is no way to keep up in the 2021 telecom world without being open to accepting change and making the most of it.
New markets and windfalls are likely to be opening up all over the place during 2021, and the global telecom industry will look very different at the end of the year than it does right now in the middle of 2021. Developments in AI, Cloud Computing, and XR tech are all linked to the rise of the telecom industry, and consumers and business owners alike should be excited about the future that is coming to life before their eyes.