2016 Telecommunications Industry Outlook | Deloitte US
Where do you see opportunities for growth in 2016?
The telecom sector continues to be at the epicenter for growth, innovation, and disruption for virtually any industry. Mobile devices and related broadband connectivity continue to be more and more embedded in the fabric of society today and they are key in driving the momentum around some key trends such as video streaming, Internet of Things (IoT), and mobile payments.
The number of “connected things” continues to grow as mobile and “smart” device utilization and connectivity continues to expand—which will ultimately shape and define the IoT space. Based on the results of our latest Global Mobile Consumer Survey (GMCS), US consumers look at their devices over 8 billion times a day in the aggregate. This is a big deal for all sectors within the telecom industry including wireless and wireline/broadband carriers, network equipment/infrastructure companies, and device manufacturers who are all critical components of this key ecosystem.
As the number of embedded devices that require mobile connectivity grows, telecommunications companies will be looking for opportunities to increase revenue through their core businesses such as network connectivity, sale of network equipment and devices, all of which this emerging ecosystem will require, as well as through new products and services that are enabled by these core businesses.
The consumer oriented “things” that comprise IoT will in large part consist of wearables, smartphones, “connected” cars and “smart” homes. We also expect manufacturing, transportation, utilities, retail, and hospitality to be big contributors to this rapidly emerging and complex ecosystem particularly in the enterprise space. Telecommunications companies will also find new opportunities for growth in the public sector, as “smart cities” gains more traction. Consumer demand for digital technologies that make it easier to access and pay for public services using mobile devices, such as parking and transportation, will help to drive these initiatives, as will municipal demand to operate the city more effectively and efficiently through applications such as connected city lighting, asset monitoring and tracking, and video security.
For telecom companies looking to expand, we expect to see a continued increase in alliances and partnerships which can help bring a variety of requisite capabilities and speed time-to-market. For example, integration with key players in industries such as retail, automotive, or healthcare is a way for carriers to expand their business, and do so in a way that is timely and less risky. Companies can avoid having to invest significant resources and time to develop these core capabilities themselves, each leveraging their natural strengths. There also remains opportunity for cross-sector M&A (e.g. telecom + media, telecom + tech), as well as M&A in other vertical industries as a way to pursue these complex solutions.
