Five emerging trends that will shape the CSP of 2020 and beyond

It is expected that throughout the course of this year, the influence of over-the-top companies will only strengthen, and CSPs will require a shift in mindset – from utilities to retailers who succeed by providing exceptional customer services – to earn brand loyalty and gain a competitive advantage

By Frank Palermo

It is no surprise that the global telecommunications industry arena is evolving at a fast pace. As over-the-top (OTT) competitors continue to exert pressure on legacy revenue streams, Communications Service Providers (CSPs) have been met with the challenge of seeking out new ways to better serve consumer and enterprise customers. 

Even though many have embraced the benefits of digital transformation, the industry as a whole remains sensitive to shifts including emerging technologies, nimble competitors and rising consumer expectations. 

It is expected that throughout the course of this year, the influence of OTT companies will only strengthen, and CSPs will require a shift in mindset – from utilities to retailers who succeed by providing exceptional customer services – to earn brand loyalty and gain a competitive advantage.

With the emergence of 5G and the continued rise of edge computing, internet of things (IoT), augmented reality (AR), and artificial intelligence (AI) – 2020 is going to be an exciting year for the telecommunications industry. 

The door is wide open for incredible innovation but only for CSPs that efficiently manage costs and improve customer service as they adopt and integrate these new technologies. Given these influences, here are five important CSP trends to watch in 2020.

1. 5G ignites new markets

There’s no question that the efficiency gains offered by 5G will accelerate business and boost consumer satisfaction. In turn, this will drive innovation in both expected ways such as smart communities and industrial IoT, as well as unexpected ways that have yet to be uncovered. 

Through next year and beyond, 5G will continue to present CSPs with strong opportunities for revenue growth through increased bandwidth and lower latency, which is anticipated to lead to higher customer acquisition and retention. To seize these opportunities, CSPs will need to find ways to best leverage 5G technologies to support emerging applications like AI and IoT.

2. AR and AI

These will become game-changers in the telecommunications industry in 2020 – improving customer service, transforming field force management, and creating new ways to interact. These benefits will be gained through AI’s ability to automate network operations.   

With the emergence of 5G and the continued rise of edge computing, internet of things (IoT), augmented reality (AR), and artificial intelligence (AI) – 2020 is going to be an exciting year for the telecommunications industry

According to one report, video traffic is forecast to grow by around 50% annually through 2023, accounting for 75% of all mobile data traffic. The increase is primarily due to the popularity of streaming video, and we expect it will further accelerate with new technologies such as virtual and augmented reality applications. For CSPs to take advantage of advances in AR and AI, they will need to optimise their networks and ensure those networks are able to learn autonomously.

3. Edge computing

This brings new opportunities and challenges. Specifically, it can reduce network latency and strain on the bandwidth by processing data locally. This becomes critical for CSPs that want to remain competitive, especially as the use of IoT devices continues to rise. 

To this end, in 2020 many CSPs will be scrambling to handle the increased data traffic. Of note, the number of IoT devices at the edge of the network is estimated to reach 5.6 billion in 2020. CSPs that can fully support edge computing will be in a better position to deliver innovative applications and services without compromising performance.

4. Building a smart network

Doing so can fundamentally change the way CSPs are built and operated. Having the right infrastructure, management tools, and visibility across the network is increasingly important – and CSPs can benefit from faster time to market, new services, ability to rapidly scale resources up and down, and lower costs. “By transforming their networks and operations with the newest technologies, mobile operators could double their cash-flow conversion within five years,” according to McKinsey.

5. Speed and agility

These will continue to prevail as the race to be first to market heats up in the enterprise and with consumers. While these competitive differentiators have always been present with CSPs, the race will heat up in 2020 with the emergence of 5G, IoT, and edge computing. In the next year, CSPs will be required to create and launch new and innovative services quickly. 

It will become apparent which industry leaders have the infrastructure, tools, applications, and skills to stay on the forefront of innovation.

2020 is poised to be a critical year that will determine the success of CSPs around the world. For strategic CSPs, there’s great potential to build and deliver amazing new services and capture new revenue streams by tapping into the power of 5G and edge computing. 

Interestingly, analyst firm IDC estimates that by 2023, more than 50% of new enterprise infrastructure deployments will be at the edge rather than corporate data centres, up from less than 10% today. And by 2024, the number of apps at the edge will increase 800%. These influences can’t be ignored and CSPs that are prepared to respond to these demands will reap the greatest rewards in 2020 and beyond.

(The writer is the Executive Vice President of Technology, Media and Telecommunications at Virtusa, a leader in developing critical solutions and skills for empowering communication service providers. Frank is responsible for building highly specialised technology practices focused on capabilities in UX, Mobility, Social, Cloud, Gamification, Analytics, Big Data, and IoT.)