As we continue in the early weeks of 2018, it is important for telecommunications providers to have a general understanding of the projected industry trends in order to appropriately plan for the coming months. Where do the opportunities and risks lie? How will 5G shape the future market? Being able to answer these questions enables successful strategy formulation for the year ahead.
Competition and M&A
With a continual shift in favor of cord cutting tendencies in fixed-line voice and video, and a substantial increase in consumer data consumption, competition is a primary risk for players within the telecommunications industry in 2018. As wireless providers continue to offer discounted packages with unlimited data offerings, revenue in this segment is expected to decrease by mid-single-digit percentages, exemplifying segment maturation.
In order to maintain relative profitability, the likelihood of mergers and acquisitions for U.S. companies is expected to increase. Companies are beginning to favor this option to increase scale, diversify their offerings, reduce costs, and eliminate competition. However, industry experts fear that M&A may not offer the long-term rewards and benefits that many industry players hope to obtain.
Consumer Preferences and 5G
The opportunity for the telecommunications industry in 2018 lies within shifting consumer trends and pursuing next generation wireless connectivity. As a result of technological advancements and increased popularity of IoT, consumers today are demanding more data and video. In congruence with Generation Z’s data consumption habits, data volumes are estimated to reach zettabytes by 2020. With these data usage factors in mind, the potential value of 5G wireless connectivity is worth pursuing.
With 5G positioned to replace hardwired connections, wireless companies continue to race to offer high speed, seamless connectivity to their data demanding subscribers. While uncertainty remains in 5G’s short term profitability and reliability, companies hope to achieve true 5G connectivity to differentiate themselves from other providers as they combat heavy competition in 2018. Given the projected increase in data and video consumption, major industry players will have to consider the perceived benefits and uncertainty of 5G, and strategize accordingly to capture the most value this year.
As we near completion of the first month in 2018, telecom operators should consider these projected risks and opportunities as they formulate their strategies going forward. With 5G wireless connection poised to offer the highest potential value, providers must ensure their systems can adapt to and manage large influxes of data that come as a result of shifting consumer preferences.
Start by contacting the industry professionals at Sincera Consulting. Our experts possess deep platform and telecom knowledge that delivers true adaptability and flexibility in creating network inventory solutions that meet your business objectives.
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