By Vincent Rousselet, Vice President, Market Insight and Strategy, Amdocs
2015 is set to be an exciting year for the telecoms industry. As the pace of change continues to gain speed, here are five trends that are going to make 2015 a year to remember.
Network functions virtualisation (NFV) to come of age
One of the new buzzwords that will be even more ubiquitous in the coming year is NFV, or network functions virtualisation. With capacity demands on network infrastructure increasing exponentially, and with parallel pressures to keep a lid on costs, service providers are increasingly looking towards the cloud.
By reducing dependence on physical hardware in favor of virtualisation, service providers will also be able to design, deploy and manage new network services much more quickly. At the same time, NFV will enable service providers to optimise their existing physical resources, and postpone costly infrastructure investments.
Analysys Mason boldly predicts that between now and 2018, NFV worldwide revenues will grow at a compound annual growth rate of 73 percent. As service providers migrate to more agile service models, consumers will increasingly benefit from increasing levels of reliability and quality of service.
Mobile payments to help bank the unbanked
With 2.5 billion of the world’s population lacking access to formal banking services, and a further 3 billion under-banked, service providers are beginning to realise how well placed they are to fill this vacuum.
With the majority of the unbanked owning a mobile phone, service providers can leverage their technology and systems to provide an ever-increasing range of financial services, especially in emerging markets, ranging from simple bill payments and money transfers to insurance services and business banking.
A Gartner study foresees this trend, predicting the mobile payment market to grow to over 450 million users by 2017.
The rise of big data analytics continues
Most of us have already accepted as ‘fait accompli’ that our personal information is being collected almost every time we buy something or provide personal information to a third party.
Meanwhile, networks are creating mounds of operational data, highlighting where capacity is short and where potential problem areas lie.
Until recently, this data was merely an under-utilised instrument in the service provider’s toolbox. Clearly, the time for big data analytics has now come.
The ability to store, organise, process and make real sense in real time out of this information has become a fundamental requirement for service providers to improve efficiencies and address market needs.
Research firm Ovum concurs, estimating that the big data market for service providers will reach $7.7 billion by 2018. We believe that in the coming year big data analytics will take a giant leap towards becoming the most important instrument upon which service providers rely upon to devise strategy.
Strategic mergers and acquisitions to ramp up multi-play
With the trend towards bundling set to accelerate, service providers are looking to expand beyond quad-play towards new lines of business. New bundles will increasingly include OTT content, cloud services, wearables and connected-X (M2M) offerings.
But acquiring the ability to offer real multi-play solutions will require traditional players to create new synergies. To do this, they will be looking towards mergers and acquisitions so that they can enter new lines of business such as fiber broadband, Wi-Fi hotspots and cable TV.
According to a Mergermarket study, in the first half 2014, telecommunications was the leading sector of the global technology, media & telecommunications market for M&A activity.
In 2015, we believe the noise we are hearing about mergers and acquisitions will become a lot louder, as operators do all they can to pool their resources and gain the upper hand.
MVNOs are here to stay
Despite questions around longevity of the mobile virtual network operator (MVNO) business model, these operators are here to stay. Indeed, we see the pace of countries opening up to MVNOs only accelerating during 2015, with evidence that global revenues from this sector will almost double by 2019.
The reasons for this are clear. For cable and fixed-service providers, the MVNO route provides a low-cost path into the mobile space without expensive infrastructure outlays. And, it’s the perfect strategy to expand their existing multi-play offerings and increase their market footprint.
According to Ovum, MVNO subscriptions are set to grow at a compound annual growth rate of 18 percent between now and 2019. Of course, the boon for consumers will be yet more competition that leads to pricing that is even more aggressive, and offers that are even more difficult to refuse.