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OTT, LTE, SMS, M&A, IoT: In 2018, Acronyms Dominate

9 months ago
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OTT, LTE, SMS, M&A, IoT: In 2018, Acronyms Dominate Image Credit: BICS

A ‘connected world’ is no longer an end goal for communications providers; it’s an essential approach and mindset which must be adopted by all in the telecoms industry. As we head into 2018, Daniel Kurgan, CEO, BICS, shares his predictions for an evolving market.

MWC’s theme this year declares, ‘mobile is creating a better future’, and with the growth of the IoT, democratisation of roaming, and more people gaining better access to communications technology, I think this is an apt projection of the year ahead. Below, I’ve outlined the major issues – including challenges as well as opportunities – that will drive debate and discussion at MWC, and shape industry decisions over the next 12 months, and beyond.

#1: Traditional telcos go over the top

The digital transformation is in full swing, which means those telcos which have not made steps to embrace this shift must do so this year. The decline in traditional voice services has coincided with the rise of OTT communications apps, in business and consumer markets.

Instead of doing battle with the digital players, 2018 will see a growing number of incumbents collaborating, consolidating, and adopting a more forward-looking ‘connected world’ vision. Moving to virtualised infrastructures, expanding and tailoring digital service offerings, adapting business models to a newly globalised market and pushing into new sectors will present new opportunities and deliver results for industry players.

#2: LTE roaming traffic will double

Global LTE traffic more than doubled in 2017, according to BICS’ recent data, and we can expect the same kind of growth this year. The surge in traffic in Europe last summer was particularly notable; a result of the EU’s regulation on wholesale roaming charges. LTE traffic for the Christmas holiday season will also show a sharp increase on last year – perhaps even bigger than summer 2016/17 – as knowledge amongst consumers of the EU’s ruling spreads, and subscribers become more confident in using roaming services abroad.

The LTE roaming trend won’t just be confined to Europe. This year, expect to see more MVNOs and tier three/four operators in Africa introducing LTE roaming services. Opportunity is ripe for growth here, as the region remains one of the only areas with a large proportion of countries that still do not offer any LTE services to subscribers.

In addition to human end-users, roaming traffic will also skyrocket in the coming years due to the proliferation of connected devices and sensors. Ensuring uninterrupted connectivity will be a vital part of supply chain management, allowing companies to transport these devices anywhere in the world, crossing borders whilst seamlessly maintaining connectivity.

Daniel Kurgan,
CEO,
BICS

#3: Mergers and acquisitions will accelerate

One of BICS’ 2017 highlights was the acquisition of US-based company TeleSign, creating the world’s first end-to-end CPaaS (communications platform as-a-service) provider. We were not alone in this activity, as the year saw a long list of M&A megadeals, as well as smaller-scale consolidation. This will continue throughout 2018, as traditional telcos look to gain digital expertise and assets, branch out into vertical sectors and deliver better services for end-users.

M&A in the TMT sector will be further fuelled by economic growth in emerging markets, developments in connected automotive technologies and the emergence of chipset and semiconductor manufacturers as key players in the IoT.

#4: Monetising the IoT

The IoT has been the mainstay of industry conversation for several years now, but over the next 12 months, IoT strategies will crystallise as invested parties aim to gain a foothold in this lucrative area.

Reliable connectivity and core communications infrastructure will be crucial, connecting the millions of ‘things’ predicted to launch in the coming years. At present, many enterprises lack these assets, so 2018 will see growing uptake of scalable, subscription-based services for integrating, managing and monetising connected devices.

Rather than simply prophesying the arrival of the IoT, companies will be able to strategise and realise business goals, with white-label solutions offering a simple, accessible, and cost-effective means of entering the ecosystem.

#5: SMS will be revived for application-to-person comms

The decline in revenues from traditional services will continue to bug telcos next year, but will not spell the demise of the SMS. Instead, SMS will increasingly be used as a secure, cost-effective, reliable and accessible means of connecting businesses with end-users.

SMS requires only basic connectivity technology, and, unlike OTT communications apps which have to be downloaded, SMS is a service which cannot be deleted or turned off, maximising customer engagement. As such, this year we’ll see growing adoption of A2P SMS by a range of industries: GP surgeries and hospitals sending automated appointment alerts to patients, delivery companies sending logistics updates, social media platforms authenticating end-user sign-in, and financial institutions sending one-time passwords.

A2P SMS will be of particular importance to this latter market, as more people opt to use mobile payments and banking services. In emerging economies and rural areas with little or no access to bricks-and-mortar financial institutions, A2P SMS will provide tailored, secure, instant communication. This will also offer a means of two-factor authentication which is gaining widespread recognition from enterprise and the public as an essential means of preventing fraud and cybercrime.

About The Author:
Daniel Kurgan was appointed CEO of BICS SA/NV on March 2nd 2007 after being COO from July 1st 2006 onwards. He started his career as Contracts Manager at SABCA (biggest Belgian aerospace company, subsidiary of French Group Dassault), where he negotiated and managed major industrial sales, subcontracting and purchase contracts with customers like Boeing, Airbus, Aerospatiale (EADS), Asian governments, and suppliers like GEC Marconi and Litton. Daniel joined Belgacom’s Carrier Division at the start of the carrier's commercial operations in January 1997, where he held several positions including International Account Manager, Head of International Relations & Sales, Sales Director (domestic and international wholesale) and VP International Wholesale, in charge of Sales & Marketing, Buying & LCR, and Customer Service and Network. In 2005 Daniel was VP Commercial of BICS, and contributed to the spin-off of Belgacom’s international carrier business. Daniel graduated from the Solvay Business School of the University of Brussels.

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