The benefits of 5G: Changing the game for customer experience
5G promises to boost customer experience in both the B2C and B2B worlds with faster speeds, more bandwidth, and lower latency.
Could the rolling stone of telecommunications be slowing, even gathering just a touch of moss? Perhaps not globally, but given the pace of advance that characterized the industry until recently, expect telecom trends 2024 to present some twists and turns.
The telco sector itself is mature, offering fundamental services that are essential for both businesses and individuals. But while internet access is increasingly commoditized (and therefore price-competitive), the costs of maintaining and improving the infrastructure needed for speedy, reliable, mobile and broadband coverage will continue to mount.
According to PwC’s Global Telecom Outlook, telcos are projected to invest $342 billion USD in their networks in 2027. By then global data consumption over telecom networks will have nearly tripled, from 3.4 million petabytes (PB) in 2022 to 9.7 million PB in 2027.
Our insatiable thirst for video is to blame, and it’s only going to rise. The report says that in 2027 an astonishing 79% of that data consumption will be digital video. Games and virtual reality will also take up a significant chunk.
Telecom trends to watch in 2024
As data consumption surges and capital costs continue to rise, telcos will have to buckle down on efficiency while finding new ways to grow business and drive revenue.
Here are five telco trends we’ll see in 2024:
- Diversification
- Proving 5G’s value
- Satellite to phone connectivity
- Improving customer service with AI
- Sustainability
1. Branching out: The telecom diversification trend
Providing connectivity alone is not enough to keep telcos afloat. In 2024, telcos will step up their evolution from communications services providers to digital services providers. This trend enables telcos to provide added value beyond core services and drive better engagement with customers, especially younger generations who expect digitalized experiences.
The big players in the US have, up to now, shied away from adjacent revenue streams, such as internet-of-things (IoT) applications and content subscriptions. In Asia it’s a different story, where South Korea’s telco SKT has launched a suite of subscription packages, including commerce and service partnerships with global brands such as Google, Starbucks, Amazon, and Xbox.
And as IoT becomes more pervasive, the opportunity for B2B private networks across sectors – such as manufacturing, healthcare, security and more – is exciting.
For example, the number of medical IoT devices will skyrocket to 25 billion, according to PwC.“Given the increasing demand for high-speed and low-latency networks across an ever-wider array of industries, networks must be as efficient and scalable as possible,” PwC said in its telecom outlook. “Telcos are looking to increase their ability to achieve these attributes by partnering across their ecosystems with specialists.”
2. Proving the value of 5G
The years-long hype around 5G has been replaced by a collective sigh as telecom providers struggle with rolling out standalone 5G (5G SA), which, unlike the more common non-standalone 5G (5G NSA), doesn’t rely on the existing 4G network.
5G SA is what 5G was always meant to be: significantly higher speeds, more reliable connectivity and better coverage, but it hasn’t been widely adopted.
In 2024, there are signs SA 5G is trending up – PwC estimates the number of global connections will rise from 2023’s 1.5 billion to 2 billion this year. But the cost of 5G services, both to the network operators and the customer, is still off-putting. And so is the challenge of making money.
If 5G is to make more of an impact in 2024, network operators need to find new ways to make the service more appealing to customers, demonstrating its advantages over 5G NSA and even 4G.
For businesses, telcos can promote the benefits of private 5G networks. IDC expects the 5G/LTE market to grow to $5.2 billion by 2027, with the bulk of that growth driven by manufacturing, warehousing, and logistics verticals.
3. Telco trend: Satellite to phone connectivity
With smartphone sales at their lowest in nearly a decade – down from a high of 1.5 billion in 2017 to 1.2 billion in 2023 – manufacturers and telcos alike are looking for features to make buying a new device more appealing. One of those features is satellite connectivity.
This isn’t really a new trend – sat phones have been around for decades – but what is new is the addition of satellite compatibility to phones and the launching of satellites for this purpose.
Not only does it give customers a reason to buy, it allows telcos to offer new services that aren’t restricted by geography and the need to build infrastructure. There’s also huge potential for commercial and government services, such as emergency use and IoT applications that don’t need to transmit large amounts of data regularly.
Big names such as Apple and T-Mobile have partnered with the likes of Globalstar and SpaceX to develop new services and the satellites to provide them.
The future for this market may see a blending of terrestrial and satellite services to create everywhere coverage, which could well be another selling point for a new generation of phones.
Products and services have become commodities in a lot of industries like telco, insurance, and utilities.
How can companies differentiate by expanding into new business models or enlarging their portfolio? We’ve got the solutions in this podcast:
4. In 2024, AI improves telco customer service
Customer service is vital in every business, but it’s especially critical in when the main product is a commodity. If a telco customer has to wait through long hold periods on the phone, is transferred to multiple agents, or forced to make several calls to resolve an issue, they’re likely to sour on the brand and switch to a competitor.
The stakes of getting telecom service right are high, according to research by McKinsey & Company, which shows a strong correlation between customer experience and retention.
In 2024, expect telcos to incorporate AI to deliver faster and more efficient customer service that boosts customer satisfaction. For example, AI can help streamline service request handling to intelligently assign tickets to the right agent and speed resolution.Generative AI can help service agents find answers and respond to customer requests quicker. It’s also fueling advances in chatbots, which can guide customers to the information they need as well as self-service options to resolve their issues. That speeds service and appeals to digital-native expectations.
Large language models, of the kind that Chat GPT is based on, can be used to create talking customer assistants, and operators SK Telecom and Deutsche Telekom have built their own LLM. Their voice-recognition assistant, accessed via a phone, has been operational since autumn 2023.
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5. Sustainability grows as a top telecom trend
Growing demand for connectivity has driven up the telecom industry’s energy consumption to the point where it’s now responsible for 1.6% of total global CO2 emissions, according to Boston Consulting Group.
Consumer demand for sustainability and regulatory requirements are pushing sustainability to the top of telcos’ agendas. Major service providers like Telefonica have integrated sustainability into the strategies.
Many operators have committed to net zero targets by 2050 or sooner, accounting for nearly 30% of global mobile connections, according to the mobile operator industry group GSMA.
Improving energy efficiency of networks, increased investment in renewable energy, and advancing the circular economy by reusing and recycling phones and other equipment are industry priorities, GSMA said.
Most telco emissions (90%) come from upstream and downstream activities, such as energy consumption of suppliers. That’s driving more telcos to demand transparency into their suppliers’ footprint and engaging with them on ways to improve, BCG executives wrote.
Deloitte predicts that telco sustainability efforts will reduce the industry’s carbon footprint by 2%, or 12 million tons of carbon dioxide equivalent.
Prepping for the future of telecom
As they focus on sustainability, efficiency, and new services, telcos also will plan for 6G.
While we’re still waiting for 5G to live up to the hype, work has begun on creating the next generation of mobile technology. Although the network itself isn’t expected to go into operation until 2030 at the earliest, 2024 is packed with 6G symposiums, conferences and discussions.
In December 2023 3GPP, the organization that devises the specifications for all mobile systems, committed to 6G, and the International Telecommunication Union published its framework for 6G’s development. India, in particular, is positioning itself as a 6G pioneer in 2024, with Prime Minister Narendra Modi claiming his country will become “a leader in 6G.”
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