The telecom industry is rapidly evolving, shaped by changes in technology and light-speed innovation. It is also an industry continually redefining its parameters, providing communications service providers (CSPs) with tremendous opportunities for growth. However, as CSPs expand their partner ecosystem to deliver innovative new services and implement new business models, new threats arise – both known and unknown. Currently, five main forces are shaping this future in telecom:
- 5G
- NFV/SDN
- Growing Mobile Ecosystem
- Artificial Intelligence and Machine learning
- Value-added Managed Services
Each of these forces are emerging, albeit at different paces and at different stages of maturity. They interact with each other in a complex thread of dependencies, driving the evolution of our industry.
5G and NFV/SDN – The first two forces, 5G and the transforming network infrastructures of NFV/SDN, serve as the base to the promise for faster data speeds and better and wider connectivity. Network functions virtualization (NFV) capabilities will enable network slicing, the architecture that will allow multiple service levels and custom-made services to be offered to vertical industries. Software defined networking (SDN) provides the ability for CSPs to dynamically collaborate with a wide partner ecosystem. Together, these technologies will bring greater network efficiency to deliver the high-value, differentiated services promised by 5G.
Growing Mobile Ecosystem – A growing mobile ecosystem, which includes the rise of the Internet of Things (IoT), represents a substantial growth opportunity for CSPs. According to Gartner, the number of connected things in use this year alone is predicted to hit 14.2 billion, and then grow to 25 billion by 2021. Many of these connected things will be enabled by a complex web of partners and service providers, opening up new avenues for risk, including fraud and revenue leakage.
Artificial Intelligence and Machine Learning – As technologies evolve, the vast amount of data we have at our fingertips continues to grow. The exciting aspect around technologies such as Artificial Intelligence (AI) and Machine Learning (ML) is a greater ability to learn from this tremendous amount of data and identify patterns and trends to make better informed decisions with limited human or manual intervention. In today’s digital environment, there are greater security risks. Service providers utilizing AI and ML will have a greater ability to predict, identify and mitigate these risks in real-time.
Value-Add Managed Services – Intense competition, demanding customers, evolving technologies, regulatory hurdles and shrinking margins are putting tremendous pressure on the telecom industry. To survive these pressures, CSPs are adopting new technologies and methodologies to improve operations and business processes. To boost business performance in this disruptive era, many service providers are relying on outsourcing certain services to experienced partners in order to take advantage of scalable, innovative technology and expertise that may be too expensive, too difficult to find, and too time-consuming to build in-house. The result is predictable, effective and agile operations with quick ROI and reduced exposure to risk.
While there is an unprecedented amount of pressure on CSPs and their networks, the future for the telecom industry is filled with opportunity to grow business, increase revenue and provide exceptional service to customers.
Note: This article was originally published on March 2013 and was updated on July 2019.
FAQs
Technology, deregulation, liberalization, globalization and new customer demands are the forces transforming the global telecommunications industry.
What are Porter's five forces wireless telecommunication industry? ›
These include the following: The rivalry between existing sellers in the market The power of buyer in the market The power of the suppliers in the market The potential threat of new sellers entering the market The threat of substitute products available in the market Understanding each of these forces gives ...
What are the 5 forces of industry structure? ›
Porter's Five Forces include: Competitive Rivalry, Supplier Power, Buyer Power, Threat of Substitution, and Threat of New Entry. The model encourages organizations to look beyond direct competitors when assessing strategy and, instead, consider broader environmental forces.
What are the 5 forces of network effects? ›
Five forces that shape competition
- Threat of new entrants.
- Threat of substitutes.
- Bargaining power of customers.
- Bargaining power of suppliers.
- Competitive rivalry.
The driving forces in an industry are the major underlying causes of changing industry and competitive conditions. These factors have the most significant impact on redesigning the industry landscape and modifying the conditions of the competitive landscape.
What are the five forces driving industry competition? ›
Porter's five forces are used to identify and analyze an industry's competitive forces. The five forces are competition, the threat of new entrants to the industry, supplier bargaining power, customer bargaining power, and the ability of customers to find substitutes for the sector's products.
What are the driving forces of change in industry? ›
The driving forces of change can differ based on the context and type of change, but some common ones include customer needs and expectations, market trends and competition, technological innovation and disruption, regulatory and legal requirements, organizational goals and values, and employee motivation and ...
What are the driving forces in the cell phone industry? ›
The Smartphone Market, a dynamic and ever-evolving industry, is driven by factors such as technological advancements, consumer preferences, and global market trends.
What is the main purpose of the 5 forces analysis? ›
Porter's five forces are competitive rivalry, new entrants, power of buyers, power of suppliers and threat of substitutes. The purpose of Porter's Five Forces analysis is to help businesses understand the competitive dynamics of their industry and make more informed strategic decisions.
What are the five forces analysis on telecom industry in India? ›
Using Porter's Five Forces Model, the forces – 1) rivalry among existing firms, 2) bargaining power of buyers and 3) suppliers are considerably high while 4) the threat of substitutes is moderate and 5) the threat of new entrants is low because of the oligopolistic nature of the industry.
Telecommunications encompasses many industries including radio and television broadcasting, cable and satellite carriers and providers, internet service providers (ISPs), wired and wireless telecommunications carriers, Voice over Internet Protocol (VoIP), and radar and satellite operations.
What are Porter's five forces and technology? ›
Porter's five forces are used to analyze an industry to determine the average profitability of a company within that industry. Adding in Porter's analysis of the Internet to his Five Forces results in the realization that technology has lowered overall profitability (Porter, 2001).
What are potential entrants Porter's five forces? ›
What are potential entrants'? These are new or existing organisations that are not currently competitors, but could potentially enter the market that your company operates in. Potential entrants are also sometimes described as: New entrants.
What are the key segments in the telecommunications industry? ›
Key Telecommunications Industry Segments
The telecommunications sector consists of three basic sub-sectors: telecom equipment (the largest), telecom services (next largest), and wireless communication. The major industry segments within these sub-sectors include the following: Wireless communications.
What are the four main segments of the telecommunications industry? ›
Different segments of Telecom Industry
There are several ways to classify the telecom industry. If we include Television broadcast, then there are four major sectors of the Indian telecommunication industry viz. telephone, internet and television.
What are the five forces analysis of consumer electronics industry? ›
To better understand the market situation, a five-force analysis is conducted, including buyer bargaining power, supplier bargaining power, threat of new entrants, threat of substitutes, and threat of competition.
What is the breakdown of the telecommunications industry? ›
Telecommunications encompasses many industries including radio and television broadcasting, cable and satellite carriers and providers, internet service providers (ISPs), wired and wireless telecommunications carriers, Voice over Internet Protocol (VoIP), and radar and satellite operations.
