Telecoms: 5G is perhaps not the boost that the telecoms industry needs

The telecommunications industry is in a curious place right now. Mobile phone usage, internet traffic and data consumption has exploded and is only set to accelerate as far as most can see, yet telecoms companies that provide the facility to do any of these things, are struggling to grow at present. There are multiple issues but principally it is not obvious what business model telecoms companies should adopt in order to secure their futures.

Furthermore all kinds of large new disruptive events in the industry are looming over the next decade, from the emergence of new technology that might disrupt the main players, the building of the 5G network, trying to realize the dream of the internet of things and colossal M&A activity. There are some good opportunities present in the industry, but without careful planning and redesigning of the traditional telecommunications business model, it is entirely possible some of the world’s biggest carriers might struggle to stay independent over the next few years.

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Key Highlights:
- 5G purely means the fifth generation of mobile network and it is being pursued by countries all over the world, with South Korea, the US, China and Japan said to be ready to launch some networks in late 2018. 5G is set to be far faster than previous generations, and unlike 4G it could open up whole new use cases for mobile data.
- Each generation has been slowly introducing new features layered on top of the previous generation. First-generation networks were analogue and only carried voice but in the 1990s, 2G phones launched a new digital network with new features like text and picture messages. Then the early 2000’s brought in 3G which was a basic introduction to features such as video calling and mobile data before 4G came in ten years after and was designed to support true mobile internet with high speeds for activities like video streaming and gaming. 5G is purely the next extension of this progress.
- The big carriers around the world have started to outline their plans for 5G and they have a keen eye on Internet of Things (IoT) technology as being the principle use case for all this extra speed. The idea is that thousands of newly connected devices from fridges talking to grocery stores to cars ordering parts from a garage will eventually spring online and 5G will provide the method and infrastructure for these devices to speak to each other.
- Some very bold claims are being made from companies involved in this concept; Ericsson the telecoms equipment manufacturer believes that there could be billions of IoT connections by 2023. AT&T plans to launch its 5G wireless service to cover 12 US cities by the end of 2018 and Verizon has similar plans. Other major world regions investing heavily in 5G are China, Japan, South Korea and the Middle East.
- A big potential problem with the incoming 5G upgrade is the demand that will be placed on telecoms companies to upgrade their networks when many of them are not in the best financial health at present. The majority of leading global carriers have had huge difficultly in recent years trying to grow their revenues and this is because of difficult market conditions and aging business models. Firstly companies will have to purchase 5G spectrum at auction which represents significant costs.

Scope:
- Examine the business landscape in the telecoms industry and how the big players are coping
- See just how the environment is difficult and new business strategies need to evolve
- Explore some of the biggest M&A deals, why they happened and how they are fairing
- Prepare for the new 5G and Internet of thing environments and how they might effect the big carriers

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Reasons to buy:
- What are the big players doing in the telecoms industry to cope with static revenue problems?
- Why is the industry suffering from issues of static revenues?
- Will 5G and the internet of things give the industry a boost?
- What players have a successful strategy at present?

Key Points from TOC:
Overview 2
Catalyst 2
Summary 2
5G is perhaps not the boost that the Telecoms industry needs 6
5G is a significant upgrade over the previous generations 6
Carriers see IoT as being their key opportunity with 5G 7
Is upgrading the mobile network worth it for struggling telecoms companies? 7
It is difficult to predict whether IoT tech will even need 5G support 8
5G might not actually generate any new revenues for the big carriers 9
Some carriers and manufacturers are being more cautious around 5G technology 9
There is a battle developing between Wi-Fi and 5G 10
Conclusions 11
Appendix 12
Further Reading 12
Ask the analyst 12
About MarketLine 12
Disclaimer 12

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