This Industry Viewpoint was authored by Laurens de Nooyer, Global Industry Director, Communications & Media IoT, Software AG
With the end of mobile’s long growth spurt, communications service providers have been undergoing a very difficult time with revenues dropping and disruptive innovators popping up every day to compete more aggressively with each other. Revenue growth is no longer supported by traditional offerings of mobile, broadband and communication services, meaning service providers are on a mission to transform themselves from product-selling providers to services and solutions providers through new technological innovations.
Next year should prove whether 5G will live up to the hype and whether Internet of Things solutions get more traction.
Let’s look at the top three predictions that will shape the telecommunications industry in 2020:
- Give me 5(G)
New 5G infrastructure is receiving a “high five” as the UK and Europe prepare for 5G spectrum auctions in 2020. The U.S. and Asia have already started with auctions and execution, and many providers are now jostling for position. Once telecom operators own their spectrums, they can build their own 5G networks. This will open opportunities for new revenue streams from new business models and ecosystems – on top of 5G.
Once this happens, CSPs will enter a new area – offering private networks to the industry to replace fixed infrastructures with cheaper and easier-to-use wireless connections. Expectations will be very high that providers will offer horizontal market solutions to their customers, such as asset monitoring and process control to reduce costs.
- IoT will grow up
IoT is predicted to bring nearly $23 billion in profits to the industry by the end of 2023, growing exponentially from the $3.45 billion market it was just two years ago. As the market matures and expectations for the execution of IoT solutions increase, CSPs will need to have end-to-end vertical solutions ready to go to market. This will take an ecosystem of partners, though is not always something providers want to manage. Instead, they will look for help in building solutions that combine devices, platforms, connectivity, applications and analysis – using partners that have full market domain understanding, support and standardization.
To date, most of IoT solution developments are stuck in relatively isolated systems that are limited in scope and their connectedness and coordination with other devices. There are some vertical solutions that are already working as semi-intelligent coordinated systems – such as smart home solutions, for example – but 2020 will also bring expectations of commercial solutions that are connected, coordinated, fully intelligent and pull insights from an entire ecosystem of data. For example, water management solutions combine all of these capabilities and are already available in the market.
- Knowledge is power
As telecommunications vendors plunge deeper into IoT-led vertical solutions across businesses, they will require a flexible environment where they can share knowledge and experiences. The best way to do this is with APIs and by putting them all into a single, branded environment where users will know where find them.
By turning to APIs, CSPs around the world will be able to gather and participate in new ecosystems for IoT success with their global partners. The sensor environment will otherwise become unmanageable, with up to 29 billion connected devices and different data standards expected in 2022, according to Gartner.
Because of this, we will see two areas of growth in end-to-end solution developments:
- Massive IoT solutions:Very large numbers of low-cost devices, sensors and actuators that consume very low amounts of energy to sustain long battery life.
- Critical IoT solutions:Applications requiring very high reliability and availability and very low latency. This includes applications such as traffic safety and critical infrastructure, as well as wireless connectivity for industrial processes.
There is tremendous time pressure on CSPs from their customers to fulfil these expectations around 5G and IoT in the next year. Providers will need to start by creating the ecosystems to help them to deliver in order to position them for success in the year – and decade – ahead.
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I really feel IoT has a bright future than 5G due to its effectiveness.