For the past two decades, waves of continuous transformation in technology and information have driven high growth in the global telecom industry. However, the industry must confront the reality of saturated subscriber penetration in telecom services. Looking to the next decade, how can the telecom industry adapt itself to the requirements of the changing environment? It will have to take advantage of opportunities through the "Four Beyonds."
Beyond people, the Internet of Things opens the door to new opportunities
The rapid development of mobile communication and the Internet facilitates the coming of a "global village". By 2012, the number of mobile subscribers will be up to 5 billion, with the network covering over 80% of the global population.
However, we have already gone far beyond connecting human beings. According to ABI's "Mobile Data Device and Service Retail Trends" report, with the growth of smart and embedded devices like netbooks, readers and smartphones, these gadgets will account for 1.5 billion of the 2.5 billion connected data-centric devices used worldwide by 2014.
The age of "Internet of Things"is here. The essence of the "Internet of Things"is to apply information and communication technology (ICT) to different industries, thus realizing "Intelligent Perception and Intelligent Control"via the adoption of ICT to achieve the objective of "efficiency improvement, scientific decision making, energy saving and environmental protection, and cost savings"to promote the upgrade and development of human society from an electronic society (E society) to a ubiquitous society (U society). That is, in the future, connecting things will go beyond helping individual people take advantage of the efficiencies and improvements made possible by electronic devices and services. In the years to come, the telecom industry has significant opportunities to help meet these individual and societal needs.
Beyond voice communications, mobile broadband will account for a significant portion of the industry's growth.
Revenue for voice services has been gradually declining with the development of mobile communications in the past decade. In the past five years, the revenue for fixed voice services decreased by 15%, and the growth rate for mobile voice services decreased from 17.5% in 2004 to 1% in 2009 in Spain.
Meanwhile, mobile broadband is entering a golden age of development, bringing human society to a new height of ubiquity. The number of mobile broadband subscribers will increase tenfold, reaching three billion by 2014. New network technologies such as HSPA/LTE provide cost efficiencies that enable further mobile broadband development. New types of smart terminals such as iPhones bring convenient man-to-machine interactions. Web Oriented Architecture (WOA) technology, which makes possible the recent and continued adoption of widgets and "apps,"bring online services and industry services to mobile phones, greatly enriching and expanding the services and applications for mobile broadband.
However, there are many challenges ahead in meeting the demands of an expected thousand-fold increase in data flow on mobile broadband for the next decade. The high price of smart terminals can restrict the growth of mobile broadband adoption. Once these challenges of data flow and cost are addressed, mobile broadband is poised to become the most significant force in the telecom industry's development. Operators looking for sustainable growth need to focus on developing mobile broadband services rather than voice communications.
Beyond the pipeline, cloud computing brings a new wave of opportunities.
The growth and advent of new Internet services and applications has turned many traditional business models on its head. Cloud computing has revolutionalized business models across a number of industries including software, hardware, and media. Not only has it moved consumers from buying products to buying services, it has redefined the structure of entire industries. Google is incubating a larger revolution to achieve development, deployment, and operation of software and services through its APP engine, with flexible expansion possible through the use of a cloud computing platform and cloud storage platform at the bottom layer. With this solution, there is no need for software vendors and users to buy any hardware equipment or platform software, calling into question the bread and butter of the products currently.
The development of cloud computing provides operators with tremendous opportunities. Since cloud computing relies on the networks, it shows the significance of networks and promotes network development. It also requires secure and reliable service providers, capabilities that operators have deep expertise in. Operators can enter the cloud computing market and create new value-added services and experiences by integrating industry content and applications in the digital supermarket model, but do so on a secure and reliable network, thereby leveraging the network and subscriber advantages unique to operators. In addition, operators can develop new business models that help them capitalize on the growing base of assets they help users manage and valuable user information they have access to, including data mining and advertising platforms.
The market for cloud computing is developing rapidly, with the market size expected to exceed USD 200 billion by 2015. Cloud computing will be a key area for business development for operators if they want to go beyond the pipeline.
Beyond the telecom industry, home networks will create new markets.
With the increase in broadband penetration, our lives will be transformed from outside to inside our homes. Our home network is composed of six components: audiovisual entertainment network dominated by the television; communications network dominated by PCs and mobile phones; sensor network; video surveillance network; home network; and an interconnection and control network. Among them, the television is the first to experience revolutionary change. On-line and on-demand has started and will continue to bring consumers a new service experience. Users can select and consume content at any time. Over time, traditional distribution models like broadcast and DVD will become obsolete.
Microsoft CEO Steve Ballmer said in June 2009 that traditional media would disappear within 10 years, to be replaced by internet-based content. European Union pointed out in "Internet of 2020"that by then, TV channels will be distributed as other Internet services, and neither terrestrial nor satellite broadcasting will be necessary anymore, except in isolated areas. We witnessed the convergence of telecom and the Internet in the past decade, and expect that in the next decade will be the convergence of broadcast, TV, and the Internet. This network convergence means unprecedented challenges as well as opportunities for those operators who can meet these bi-direction and high bandwidth needs.
The telecom industry will continue to experience growth as demand for information and connectivity increase. With this growth comes challenges in addressing the expected hundred-fold increase in network flow brought by mass terminals and mass digital content, and the thousand-fold, increase in traffic flow on mobile networks. There will also be bandwidth and cost constraints to tackle. However, those operators who adequately prepare for and take advantage of the opportunities in the "Four Beyonds “will achieve growth. To that end, Huawei will continue to innovate in products, services, and technologies in order to develop a future-oriented single network strategy that supports the growth of future services and promotes sustainable development for the entire industry.
Contributed by Huawei
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