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Media and Communications Industry Landscape
The media and communications industry is experiencing a period of massive change. Consumers across all age groups are streaming more content than ever before and continue to display an insatiable appetite for mobile data, demanding personalized, targeted experiences anywhere, anytime. This is driving companies to package and deliver content directly to customers, disrupting traditional distribution business models.
Regulation, protecting data privacy and intellectual property (IP), cyberthreats, and reducing risk are top of mind for industry executives.
The arrival of fifth-generation (5G) wireless technology offering faster data speeds, ultra-low latency, and the capacity to create a “connected world” of the Internet of Things (IoT)—including people, wearables, appliances, cars, cities, and more—is creating significant business opportunities for media and telecom companies across the globe.
Telecommunications companies are comprised primarily of communications service providers and network operators. These businesses build and maintain infrastructures that provides voice, data, and video connectivity to fixed and wireless devices. Traditionally thought of as network infrastructure companies that monetize connectivity, networks are converging to carry IP packets. Networks are becoming software defined and cloudified. Networks are becoming clouds; clouds are networks. Instead of monetizing connectivity, communications service providers are increasingly changing their business models to focus on monetizing content delivered via connectivity and premium services. To take full advantage of this trend, communications companies are becoming media companies with mergers and acquisitions greatly intensifying in recent months.
Effects of disruption in the industry
Telecommunications Trends and Disruptors
The exponential pace of change driven by consumer demands is forcing businesses to reinvent the services they provide and the way in which they provide them. With over five billion mobile users in the world today, it is not enough for companies to focus solely on their networks and technology; it also requires a fundamental shift in their business modeland processes to provide their customers with a digital experience that builds brand loyalty and wallet share. Telcos are pressured to develop, upgrade, and successfully launch and market new products to meet customer demands.
“Digital native” companies are offering the same staple services of voice, messaging, and video calls that used to be the domain of traditional telcos. These over the top (OTT) players disrupt the revenue chain and customer interactions going “over” the telcos, rather than through them.
Players such as Apple’s FaceTime, Google Hangouts, Skype, Tencent WeChat, and WhatsApp threaten to cannibalize telcos’ staple offerings with innovative, easy-to-use, and more attractive messaging and communication services.
Telcos and other service providers are partnering with and becoming primary OTT solution providers in their own right—in order to bolster revenues, offset downward price pressures on last-mile connectivity, and build customer loyalty. New revenue streams will emerge through streaming services, exclusive content, IoT connections, smart city capabilities, and more.
Harnessing the power of data through analytics and AI technology will provide telecom companies with the ability to use data and machine learning software to optimize networks, predict future industry trends, predict infrastructure snags, and continuously assess their network services, minimizing down time. AI-based chat-bots and virtual assistants will transform the way businesses handle customer service, automating conversations and imitating human speech, while drawing data and insights to provide personalized and positive experiences.
5G is the most highly anticipated change to the future of telecom. 5G networks will enable:
- More detailed and efficient augmented and virtual realities
- Higher resolution video
- Higher speeds
- Lower latency
- Fully autonomous vehicles
- Massive connected IoT networks (like smart cities) and more
Smart cities create an interconnected network that residents can access online, often via a mobile app. A network like this provides data and communication channels that allow users to better manage their day-to-day activities, from corresponding directly with their government, to instantly finding a parking spot on a busy day. Smart cities create a better quality of living for their citizens by streamlining urban services like energy and transportation through smart technology. This will be enabled by the power of 5G networks.
The growing demand for connectivity will require companies to have broadband access and high-speed infrastructure. Also, extracting the full value of data is only possible when adequate IT and technology form the infrastructure that seamlessly connects that data and enables its exchange—anytime and anywhere.
The rise of the IoT will drive increasing demand for machine-to-machine and cloud services. Linking everyday objects and enabling them to send and receive data from one another will require investments in IT and infrastructure services.
Telcos are increasingly subject to attacks as networks become increasingly software defined. Holistic network security is more important than ever, and encryption is pervasive technology. Regulations such as the General Data Protection Regulation (GDPR) are driving stronger encryption practices as users, organizations, and lawmakers alike become increasingly concerned about privacy and the safety of their data and infrastructure.
Regulatory and compliance risk due to changes in international and domestic laws, rules, policies, and tax regulations continue to add pressures to the bottom line.
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