How the telecoms industry is evolving with the online world

by Dhiram Shah

The Internet has had a transformative effect across the economic spectrum and its impact has been keenly felt in the telecoms industry.

If you look at the recent history of the telecoms industry, you will see a fundamental shift in the approach to business within the sector, beginning in the mid-1980s with the liberalization of telecoms markets, and the ending of monopolies that had dominated the telecoms landscape for decades. The effect of this liberalization was a much more flexible industry, able to adapt to changing circumstances, and this flexibility would be needed because the Internet was about to disrupt the industry.

The Internet came from outside of the telecoms industry, having its origins in science laboratories and in wider academia, but the telecoms industry had the infrastructure and the experience needed to commercialize the Internet and realize its potential to business and consumer markets. The early rollout of Internet connections to consumer markets was done on fixed-line systems, utilizing existing telephony infrastructure. Even when voice communications began to gravitate online with the development of Voice over Internet Protocol (VoIP), the systems used mirrored the architecture of the already existing telephone networks.

That the telecom industry has been so successful in utilizing the Internet means that it is at the center of growth and innovation across any number of other sectors. Internet-enabled devices have become a core element in everyday life. Just think about how many times a day you browse online or check your email. According to the findings of the Global Mobile Consumer Survey for 2015, as compiled by Deloitte, consumers in the US look at their devices more than 8 billion times a day, if you take the aggregate figure. This level of engagement represents an opportunity for telecoms companies through network connectivity, as well as the sale of devices and associated equipment. The fact that consumers are so comfortable with the Internet being part of their everyday lives means that something like the Internet of Things will find it relatively easy to become mainstream. Already, we are seeing the idea of wearables, “connected” cars and “smart” homes gain critical momentum, and that momentum will only gather pace as time goes on. As demand grows for digital technologies that make life easier and more efficient, telecoms companies will partner with those companies providing the services to reach consumers and businesses demanding them.

The fixed-line systems that once dominated the telecoms industry have been surpassed by mobile technology, and mobile will continue its growth into the future, so telecoms companies have to keep this in mind. If you are familiar with the impact of mobile communications and how mobile has evolved, then you will know that the revenue stream from voice services has gradually begun to dry up, but there is still a huge opportunity with mobile broadband to create revenue, due in no small part to the increase in mobile connectivity on a global scale. Much of the growth is coming from developing markets and the less affluent, for whom mobile is cheaper and more accessible than fixed-line technology.

That the potential of the Internet has not yet been fully realized – owing to the rapid advancements in technology that leverage the online world – is something that the telecoms industry has to bear in mind. For instance, the range of digital services available in the home remains below what we might have envisaged, and the opportunity exists to maximize developments such as teleworking, distance education, and e-health services delivered to the home. Undoubtedly, there are individuals and organizations from the telecoms world working on the innovations of tomorrow.

If you want an insight into how individuals involved in the telecoms industry plan to manage the future, then a good example would be Don Burns. A founding president of Telco Communications Group, Inc., Burns was the man behind a new billing process for long-distance phone calls that enabled Telco to provide customers with rates that were up to 50% lower than those offered by the leading telecoms players at the time. Burns was also one of those who helped pioneer VoIP, and is chairman of leading VoIP company magicJack, so he has a great insight into how those involved in telecoms can leverage new technologies for their own benefit and for the benefit of their organizations.

The most successful industries evolve with the times, adapting to new technologies and economic circumstances. The challenge for the telecoms industry is how to continue evolving with the online world in a way that benefits it.

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