Telecoms: Keeping pace with the Fourth Industrial revolution

Look around and you can see how technology has changed the way we live our lives, even as recently as five years ago. The pace of change from here is expected to be exponential. Mobility and connectivity have become a must have in human lives and we are just at the start of the Fourth Industrial Revolution.

Source: Christoph Roser at AllAboutLean.com

The Fourth Industrial Revolution

The Fourth Industrial Revolution is characterised by new technologies that are bringing together digital, physical and biological worlds1, impacting all disciplines, economies and industries. It is the so called cyber-physical systems, cloud computing and the Internet of Things (IoT), which are not just driving changes and efficiencies through the production line, but are transforming everything we do.

Connectivity is pervasive, data storage is limitless with cloud computing, hardware is becoming increasingly cheap and at a price that everyone can afford. Moore’s Law continues and Metcalfe’s Law is driving value through the network effects.

Think of Facebook, LinkedIn and Twitter, just to name a few. The more users on the network, the more valuable the service is to the community and social networking has already become a big part of our daily life. Billions of people will be connected in real time. Ericsson has forecast that there will be around 26 Billion of connected ‘things’ by 2020. We are at the verge of a paradigm shift.

Source: List.ly co –founder

The new wave of Technology Innovation

Businesses that are able to keep pace, be agile and adapt to these changes will benefit the most. The impact of the technology innovation will be disruptive to nearly every industry and process. Connected cars or driverless cars, connected home, smart cities, artificial intelligence, robotics, bitcoin, blockchain, 3D printing, biotechnology and nanotechnology are all examples of new technology innovation and advances that are still in their infancy. The opportunity for new products and services is limitless.

Is the Telecommunication Sector keeping pace?

We are living in a highly competitive world and competition continues to dial up. The telecommunication sector is at the heart of these changes, and the opportunities arising from this revolution are very significant. Telecoms need to invest and be ready to compete as the change will come thick and fast. Billions of dollars are being invested in this market into network infrastructure and technology platforms to support the needs of devices. IoT is about the ‘Things’, connectivity, real-time data in the cloud and analytics.

Connectivity and data analytics are the areas where telecoms can play and are playing. We know that the three key players, Telstra, Optus and Vodafone are getting their networks ready for the IoT and the exponential growth in demand for data.

Cellular networks will have a significant role to play in the world of IoT, providing connectivity. Telstra, Optus and Vodafone have been running field trials for their IoT networks and are planning for network wide deployment. They are also getting network ready for 5G, playing a vital role in assisting companies to connect insights back to their business.

IDC, an information technology research firm, has forecast that IoT will grow to a $1.7 trillion market opportunity globally by 2020. A significant part of this revenue opportunity is in the end user products, however, the revenue opportunity in connectivity and analytics remains significant.

The usage of data will be the most significant area of growth. New economic models will continue to evolve and the industry needs to continue to keep pace with the changes, to be competitive, predictive and pre-emptive. There is also increased focus by the telecom providers to control communication at home. If you control home communication, you will get a large share of the consumer wallet. Connected home will change the way we live. For the provider, it is a new revenue stream as well as churn reduction exercise.

The telecom industry continues to be a highly regulated industry and regulators need to adapt to this new, fast-changing environment to embrace the technology disruption that the Fourth Industrial Revolution brings as it shapes the future and benefits consumers and the economy.

Cloud and SaaS (Software as a Service) providers are also well positioned to ride the wave of the Fourth Industrial Revolution.

Source: Ausbil Investment Management Limited

1 The Fourth Industrial Revolution by Klaus Scwab.