Part 1 – What industry 4.0 will mean for telcos

We are currently living at the very end of the third industrial era as Industry 4.0 is upon us and most would agree that the progress that has taken us to where we are now has been such an extensive journey. If we look into history, each new era brings in new forms of technology and way of life that of course would have not been possible without the hard work, discoveries, and innovations of our predecessors. In the technology sphere, specifically for telcos who have always been the epicenter of communications, the early 2000’s marked the beginning of a surging call for transformation on their business models unlike they’ve never experienced before.

The kaleidoscope view of the digital landscape

Suffice it to say the dawn of the third millennium introduced not only to telcos but also the world to a new digital landscape with the emergence of internet that subsequently changed market demands and brought in the genesis of Over-the-top (OTT) players; Facebook was started in 2004, YouTube in 2005 and WhatsApp in 2009 while Netflix may have established their business in 1997 but it’s only by 2007 they began gaining a larger traction after expanding their business towards OTT. In relation, the OTT entrants mentioned above are only a few among others who all have profoundly diversified the competitive boundaries of telcos beyond recognition from its earliest days.

Now, as we are gearing up to embark on the new digital revolution, industry 4.0 is expected to introduce the world into yet another major shift, the kind that will be bursting with a whole new level of unprecedented connectivity that will move at exponential rate, driven by disruptive technologies such as Artificial Intelligence (AI), Internet of Things (IoT) and other advanced innovations. Dare we say that the disruptive technologies wrought by industry 4.0 will even lay the foundation for the next frontier as the satellite industry, for example, is already taking steps to bring space-based internet further.

The possibilities seem endless and all of these has been the talk of the town for quite some time in the tech world. It is a brazen line to say that telcos will not be immune towards this transformation. In fact, this new digital revolution will push telcos in new directions and open doors for opportunities that certainly will shake their business models once again.

So, let’s take a look at some of the opportunities that telcos can achieve in the fourth industrial revolution:

Leading next-generation applications

5G networks are the next generation of mobile internet connectivity

The technological metamorphosis onto the new digital revolution put telcos in a prime position to create an ecosystem wherein there is a demand for huge amount of data and hyper-connectivity. These requirements can be satisfied by next-generation technologies like 5G which provides a huge amount of bandwidth. In fact, the fourth industrial revolution hinges on 5G technology that promises services across a wide scale of disruptive technologies. According to Stratfor, the fifth generation of mobile communications networks will go beyond its previous generations of networks handling three different communications types: enhanced mobile broadband, massive machine-type communications, and ultra-reliable and low latency communications. Many telcos around the world have already jumped on the bandwagon in striving to become 5G pioneers.

Telcos and IoT: The Billion Dollar Opportunity

IoT refers to billions of physical devices connected to the internet, collecting and sharing data.

The demands for higher connectivity has created a big segment of the Internet of Things (IoT) which is expected to become a major source of revenues for operators. The IoT sector is almost an identical match for operators’ strengths and resources with their perennial ability to connect millions of devices to complex networks. With such massive connectivities, we can expect consumers’ behavior and expectations will certainly change as the requirement for data will continue to grow.

Uniquely positioned with unlimited access to network infrastructure, telcos can provide better performance, wider scale, and – tapping into vast pools of user data – much better usability than competition with IoT. Shaily Kumar from Digitalist Magazine explained that “having the access to tap the power of such predictive analytics, telcos could avoid network outages when there is any huge events that usually tagged with data surges. Comparably, IoT technology will enable telecom companies to monitor and plan maintenance more effectively, optimize bandwidth and coverage to boost download times, and improve customer service by reducing dropped calls and service wait times. This in turn will minimize revenue lost to service disruption.”

Gaming goldmine

The gaming industry is poised to be the next goldmine for telcos

As we enter the new digital revolution, telcos also have the added advantage to penetrate the games industry which is relying more and more on telecommunication networks and data. Connectivity and data have been the aim of many developers in the games industry since online gaming networks were first introduced for home consoles back in the 1990s. Now, current consoles all have online capabilities and even casual single player mobile games require a constant server connection to operate.

Add in the potential for the new Augmented Reality (AR) experiences, not forgetting the growth in mobile gaming, e-sports and the insatiable need for new content, all these gaming galore offer huge opportunities and a goldmine for new revenue potentials for telcos. According to Mediakix, the global gaming market will reach over $115 billion in 2018. The mobile gaming industry alone is expected to generate over $50 billion which accounts for nearly half of all global gaming revenue. Besides providing connectivity and data, telcos are also primed to take advantage of the multifaceted games industry by offering other value-added solutions to game developers such as direct operator billing, and HTML 5 games.

The not so final words

With everything evolving towards the new digital revolution, telcos must disrupt their own ways of doing business. The fourth industrial revolution propounds a new hyper-connected paradigm and embracing the disruptions as well as the transformations that come along with it will be strategically imperative. Stay tuned for Part 2 of what industry 4.0 will mean for Telcos to know more!

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Megan Leong

The author Megan Leong

Megan is a content writer for the tech industry, based in Kuala Lumpur.

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