2020 has been quite a year and the least we can say is that it was “unprecedented”. Existing ICT and telecommunication trends gained more ground in light of the new normal imposed on everyone as a result of the COVID-19 pandemic. The telecommunications industry was put under the spotlight given its substantial role in keeping businesses and almost all sectors running. As 2021 begins, new opportunities for telecom players will emerge.
Businesses have been obliged to reshuffle their priorities in 2020 in order to meet the new demands and seize market opportunities. Most importantly, 2021 is set to bring revenue growth to the telecoms sector. Analysys Mason’s latest forecasts predict that telecoms service revenue worldwide in 2020 will be USD43 billion less than it was in 2019 (a year-on-year decline of 2.7%). A third of this loss will be recouped in 2021 with growth of USD13 billion (up 1% on 2020), but global telecoms revenue will not exceed 2019 levels again until 2023.
Digital transformation: The backlash
Digital transformation was the highlight of 2020. Companies who were “digitally-ready” were able to overcome all the challenges brought about by the COVID-19 pandemic. For those who weren’t, digital transformation was rapidly placed on top of their priorities. However, many fear that the efforts deployed by businesses to embark of a digital transformation journey swiftly may go beyond their actual capabilities and cause a backlash in 2021.
Patrick Smith, CTO EMEA, Pure Storage says: “For those businesses that hadn’t already embarked on a digital transformation journey, the pandemic forced them to overhaul their IT, and at speed. In the process, many companies over rotated in their technology choices, opting for infrastructure beyond their needs and choosing expensive solutions with vast capacity. In the long term, these choices may prove unsustainable, and in 2021 businesses will need to refocus on the medium-term, rebalance and opt for the solutions that fit their needs whilst remaining agile. In 2021 the CTO’s role will need to adapt to being the ‘renegotiator’ — finding the best tuned systems for streamlined budgets.”
Cloud solutions: A new addition
“In the coming year, public and private monikers will converge into a singular experience around billing, payment, identity, logistics, and security. The consumerization of the enterprise will only be complete when build (private clouds) vs. buy (public clouds) becomes a non-issue for the enterprise architect. Clouds will converge, post-pandemic, with 2021 being the year of desktop-as-a-service (DaaS), disaster recovery-as-a-service (DRaaS), and database-as-a-service (DBaaS)”, according to Aaron White, regional sales director - Middle East at Nutanix.
For operators to seize the new opportunities in 2021, they must consider cloud solutions as part of their portfolio. Operators providing cloud capabilities will combine unified communications, security and remote access which can enable home working and cloud gaming.
The rise of artificial intelligence
The role of artificial intelligence and machine learning will be amplified in 2021. We have seen how AI technologies were at the frontlines of the fight against COVID-19 whether in terms of logistics or healthcare.
“2021 will see the biggest rise of AI/ML in the history of healthcare -- pharma, biotech, life sciences -- as humankind grapples with the current pandemic. We will blur the lines between computing and biotech for high-velocity advancements in the field of virology”, says Nutanix’s Aaron White.
According to Analysys Mason’s latest TMT report, Virtual RAN deployments will largely be deferred beyond 2021 but will represent a USD22 billion market by 2025. Many operators will deploy 5G core networks independently of their relationships with RAN suppliers which will mean that the mobile network will be open to more vendors.
On the consumer side, 5G will not be much of a game changer. In such economically uncertain times, consumers will be reluctant to pay more for 5G services. Furthermore, many operators still have to demonstrate their 5G capability and improve its coverage.
However, 5G market will likely be central to the 5G business case, even though B2B offers are still rare. 5G back-up for fixed services (for example in SD-WAN solutions) will become prevalent and more standalone 5G products for enterprises will be launched.
Innovation will define 2021
The disruption caused by the COVID-19 pandemic will accelerate IT innovation. The new normal, fueled by advanced technologies, will continue to change the way we work, study, and live. Automation will be one of the keywords in the new year for it will support businesses and mobile operators to cater to customers’ demands. Spending on fully automated orchestration required by 5G core virtual networks is expected to increase from USD4 billion in 2020 to USD20 billion in 2025.
The world wasn’t well prepared when the pandemic hit in 2020. 2021 will be the year of opportunities and learnt lessons. The telecommunications industry has proven its ability to manage crisis – better yet, find solutions – and there is no doubt that in the upcoming year, new proactive solutions and innovations will emerge.