Telecommunications

A sector in reconstruction after years of friction in the operators’ core business

Telecom operators have been forced to deal with major challenges as they face intensified competition in their core business, while maintaining their strategy of massive investment in network development (4G, optical fibre) in order to manage rising bandwidth demand. Of course, investing massively in networks and innovation at a time when turnover and operating margins are falling is a great challenge. In Europe, operators’ income is drying up and attempts to diversify content have not curbed this trend.

Across Europe, a review of the European regulatory framework began in 2016 and provided a response to changes in the market: priorities and regulatory resources of the sector should be amended.

On a national level, sector concentration was heightened.

Searching for new sources of growth

Just as general consumer networks are facing problems related to increasing demand for bandwidth and coverage, the emergence of new markets for connected objects is creating an opportunity to set up low-bandwidth telecom networks with increased universal coverage and a worldwide footprint, possibly providing a source of growth for operators with high-point base stations or satellites. These networks face issues such as the stabilization of technological choices, the concrete expression and design of user-based innovation, and the technical and operational capacity to provide new levels of secured communication.

Along with this, telecom operators continue to study new opportunities for growth, that are related to various approaches: invest in the assets produced by their network-operator skills (cloud computing, dedicated wholesale and B2B public networks), continue to offer wider ranges of services for subscribers (distribution of content), exploit the mass data they control (Big Data) to optimize network management and provide new B2C and B2B services.

Indeed, aside from the network constraints it involves, exponential growth in the volume of data exchanged (+70% per annum), especially because of new uses of mobile Internet, is also a major asset for operators. Big Data technologies, which encompass the collection, storage and analysis of information are opening up new opportunities like the use of data generated by the network, connection to platforms and to smart objects to produce added-value data or offer new services (connected cities, smart meters, traffic information in real time, the adaptation / optimisation of public-transport networks, visitor numbers at shopping centres and tourist locations, health chips, new, better-targeted service offers, etc.).

Because of their technical resources and commercial assets, telecom operators are recognized players that are advantageously positioned in new markets, such as the smart city and new-generation banking.

Grasping these opportunities means rapidly gaining a foothold in areas of growth by means of strategic partnerships and the development of appropriate internal skills.