Telco’s new role. Again!

1 Apr, 2016 | News

It looks like old news, but the telecommunications industry is preparing for yet another structural change. And preparation will be even more intense this time.
Laerte Sabino*

In 2015, press and industry players discussed the 4G expansion while the rest of the world started to show off some compelling examples of connected things. Cars, thermostats, wearables, there are innumerous IoT examples going through final testing stages or already in consumers’ hands.

Now that two of the biggest annual technology shows have happened – Consumer Electronics Show (CES) and Mobile World Congress (MWC) – we have started to find out which of the latest trends and technologies will finally be rolled out this year. 5G, Machine-to-Machine (M2M) communication and interoperability, Network Function Virtualization (NFV) and Software Defined Networking (SDN) are gaining momentum to support new use cases in networking.

IoT applications – integrating daily use traditional products with technology and mobility – may ven change names, but the concept remains the same. In IT, traditional companies like IBM are reinventing themselves through cognitive computing, while once “web only” players are experimenting mobile apps. All of them are sharing the same space and attention with mobile “newcomers”, such as fashion brands, sport apparel, automakers, security and other companies who used to have the core of their businesses away from mobile technology and are rapidly applying IoT applications into their core products and services.

This year, the attention will also turn to virtual reality. As technology matures, many applications other than games start to be developed, opening up one more arena where niche players and more traditional tech companies such as Swedish Ericcson, South Korean Samsung and Chinese Huawei will fight.

Virtual Reality and IoT impact will be huge. After all, adding over 25 billion new consumers to an entire industry does not happen every day. Service providers will have to review their market positioning and decide whether to stay as connectivity providers or to become application providers. In addition, they will also need to review their marketing strategy to understand new ways to access these consumers.

As Icaro Tech’s COO, it is my understanding that networks will change, and operations will need to be involved to support new flexibility, scale and reliability standards. As expected, they will lead initiatives such as cost reduction per device and end point. To increase efficiency using automation and analytics and being capable of applying a continuous evolution to the business are not exactly new requirements, but they just became the critical ones.

Looking ahead, the road to 5G start with some known challenges that must be overcame. Issues like 4G coverage, the heterogeneous quality of services and data monetization are under discussion, and we need to solve them in order to pave the road to 5G. Even more when key indicators to 5G are enhancing network capacity and supporting IoT dissemination, where predominant end points are machines heavily characterized by data traffic that needs monetization with different parameters for bandwidth, latency and, most important, reliability.

After all, who wants to be in a self-driven car that, all of a sudden, loose communication with the other cars and the surrounding infrastructure? To enhance the interoperability among multiple devices and market players will be a mandatory pre-requisite. On the business side, regardless of telco carriers market positioning, they will need to attract and monetize the M2M traffic. Currently, as a growth strategy, but very soon as a survival condition. In this context, calculating the ROI model continues to be a problem to be solved.

In the meantime, another decision point is under discussion: have we started Skynet already? Cognitive computing promises to open the “Pandora Box” and give systems a bigger decision-making capacity. In one hand, wouldn’t it be wonderful if an oncologist could count on tech support when examining an MRI and have a more precise cancer diagnosis? What about the possibility to reduce traffic accidents, since 80% of them are caused by human errors? However, what are the moral limits? According to specialists, cognitive systems are amazing, but they should be used as decision-making support systems, where the moral limits must be reinforced by the humans who manage them. Certainly, this topic deserves a deeper discussion.
In summary, specialists and key IT and Telco market players are aligned in switching the focus to the end user. Discussions go from cognitive systems, the agricultural business, IoT references to Formula 1. That’s right, the technology industry now uses the F1 as a reference to developing new solutions, exactly like the auto industry has been doing for decades. That indicates how hard it will be to separate technology and mobility from other industries.

As a result, to enable the participation of different players in the multiple IoT ecosystems will allow us to testify more applications and use cases. Which makes it even harder to forecast how far we can go.

*Laerte Sabino is Icaro Tech’s managing partner and COO

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