Over the last decade, Telecommunication is one of the fastest growing industry, which has not only revolutionized the way of communication, but has also opened numerous opportunities for businesses to prosper. Telecom industry has enabled people across the world to be connected. This has also paved path for online businesses to grow, which is an effect of internet and smart devices together.
Telecommunication: Industry Size
Telecommunications is a mammoth industry, wherein market players are involved in making hardware, innovative software and accordingly provide services. Presently, from buying goods to watching TV, communication to traveling, IT and telecommunications are a part of individual life. The rapid growth of the industry and use of smartphones have changed customer behavior and their expectations of interaction with different business providers. Telecommunication is a very dynamic market and some top players in the global industry are highlighted below.
Figure: Top Telecom Service Providers
Telecommunication: Hunt for subscriber base
These telecom players hold the top most position in the industry, with huge subscriber base. The industry possesses high threat for new entrants. Recently in Asia, Reliance Jio has entered the market with differentiated offering and hence have grabbed the subscriber base of almost all service providers in India. Major players with their subscriber base are highlighted in the following diagram.
Figure - Top Players with approximate subscription base are highlighted below
Every year mobile phones are becoming more pervasive. Today, mobile phones are just not the typical mode of communication, instead have become a part of individual’s life and has proved to be powerful personal computing device. Organizations across all the industries have enabled the shift to mobile; however, the most critical part has been played by the network operator/s or providers in the industry. From their historic investments in cellular radio in the 1980s-1990s till the roll out of 3rd and 4th generation mobile broadband and deployment of Wi-Fi in houses and hotspots, network operators play a crucial role in the connected economy.
Telecommunication: Mobile Technology
The role of mobile technology in every individual’s lives has become even more significant as we transition towards a Digital Economy. For instance, a survey conducted in Canada in the year 2015 showcased that Canadian users spent more than 5 hours per day using the non-voice features of their phones. Diagram below shows the forecast for the growth of connected devices in the coming years.
Figure: Forecast for Growth of connected objects in near future
Additionally, tens of billion more devices will come online and become connected by 2020, suggests a forecast. This level of connectivity would allow people on-demand access to and control over entertainment and many other aspects of life like never before. It is found that the top apps downloaded have been from the entertainment, communication and retail sectors.
Mergers and Acquisitions (M&A) is the popular strategy used by the market players in Telecom industry. According to a latest report by a consulting giant, stated that telecom companies across the world are largely focusing on Mergers and Acquisition activities in the coming years. Sector convergence, impact of technological evolution on their business models and revenue streams are some of the major elements that are driving M&A in telecom sector. Most recent example would be of a merger between Indian subsidiary of the United Kingdom (UK) telecom giant Vodafone with Idea Cellular, a largest wireless telecom operator in India for $23 billion. Further, Everything Everywhere (EE), a network provider and internet service provider in UK have acquired Orange and T-mobiles network, recreating a new brand EE. Presently EE is the biggest network operator in UK. British Telecom has acquired EE in the year 2016. These are some of the major examples of Mergers and acquisitions in the Telecom industry.
What’s emerging in the sector?
The rise of 5G networks would ignite a wave of change from the year 2017. Though the technology is yet to fully defined, the network carriers have already begun proceeding with lab and field trials to check the basic connectivity elements, and ensure they stay ahead of competition. The 5G promises superior level of speed, efficiency, and limited latency, which will be vital to support connected things during the times ahead.
The race for 5G is aggressively perceived by the telecom companies, and it will continue all thorough the year. With many telecom companies having already developed 5G architecture and also aggressively initiating field tests this year, 2017 will be a potential year for commercial offerings to be launched.