IDC's Asia/Pacific Events
An Opening Industry
The telecom industry is moving away from a focus on CAPEX-driven infrastructure toward OPEX dominated software and services. IT and telecommunications converge at the software and equipment layers. Business oriented applications are being built, giving businesses the ability to roll-out new services at DevOps speed. Software vendors supplant traditional equipment suppliers in the appliance space. In the foreseeable future, marketplaces will buy and sell the software version of appliances.
In this emerging digital universe, the following trends force transformation on the telecom industry:
Open investment: Carriers are investing in non-core telecom areas, such as digital content, precision advertising, video analytics, retail, government, media and health care solutions. Operators are investing to stake their claim in a new market that has no association with traditional telecoms.
Open source: Service providers are using open source technologies to drive multi-vendor implementations that create differentiation. SDN and NFV are areas where open source is gaining traction. Open source technologies will wipe $7 billion CAPEX dollars from Asian service provider budgets. Successful suppliers will sell to unfamiliar parts of the business via non-traditional avenues (e.g., Telecom CMO).
Open APIs: Operators are also opening networks, application and interfaces to work with third-party developers to take advantage of new markets such as Internet of Things. Carriers are embracing (and defining) these new technology areas, becoming vertically integrated solution providers founded on new partnerships in fluid and dynamic ecosystems.
Open Competition: Carriers will need to look beyond traditional competitors in a changing market. There are banks, retailers and OTTPs (most recently Google) with ambitions to introduce and roll-out telecom services. Carriers are acquiring banking licenses (most recently Airtel) as pre-requisites for new businesses grounded in rich analytics, allowing them to to compete more effectively in the marketplace.
Connecting the next billion users
While the industry moves to openness, focus must be on the next billion connections. The exponential growth of mobile connections in Asia's emerging markets – and the hugely beneficial impact of greater connectivity to their economies – has been the focal point for operators in recent years. Emerging markets including India, Philippines, Indonesia and Thailand offer large populations who lack internet connectivity. Opportunistic partnerships with OTTPs are giving way to relationships that can generate top-line revenue and market share for both parties. Those partnerships have been hard to come by, for both carriers and OTTPs.
Changing consumption patterns, lightning fast networks, powerful affordable devices married with new channels for content and apps are all fundamentally changing the market. IDC projects smartphone shipments across Asia exploding from nearly 650 million in 2014 to over one billion in 2018. This gives rise to mobile-banking, m-commerce and micro-payments, bringing commerce into the hands of the consumer. Telecom carriers cannot tackle these areas on their own, making partnerships essential to drive the transformation of traditional supply chains. The next billion connections will drive an exponential growth in mobile data that can only be off-set by new business models goaled on monetizing user data and their digital assets.
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