Telecom companies: critical actors now and in the future
February 26, 2024
2020 was set to be the year of massive 5G deployments. Instead, it became the year of the most devastating pandemic in generations. This dramatic and unexpected event caused major setbacks in 5G.
Even so, the pandemic revealed the absolutely essential nature of telecom companies. They facilitated remote work, e-commerce and supported the entire shift online during the era of social distancing. It is, and will remain, a critical sector thanks to its role as a facilitator.
In fact, despite the dramatic situation of 2020, many sectors were still able to grow. For example, for the first time ever there were more connections between IoT devices than there were between non-IoT devices, according to IoT Analytics. This growth wouldn’t have been possible without a robust infrastructure that can guarantee connectivity among so many devices.
Telecom companies also played a critical role in the everyday lives of people. Confinements increased Wi-Fi consumption to record levels. It supported everything from streaming TV to connecting with loved ones through video calls. The keyword here is connectivity. Connectivity between users and machines, both at the personal and professional level.
These companies have the challenging role to be the facilitators of this connectivity, which not only boosts productivity but transforms entire business models, processes and products. This will be further achieved not only through the deployments and advances that were already expected, but also through consolidating technologies and ecosystems that already exist like satellites, optical fiber and Wifi and working to define the next communications standards. In this sense, telecom companies aren’t only focused on 5G, even though it's where they’ve placed much of their attention.
5G is just the beginning. They are also starting to design new generations like 6G and WiFi 6 as well as other fields like automation via artificial intelligence and machine learning.
Innovation and competition at a global level
Telecom companies are collaborating to develop new communications technologies. The advances in edge computing use 5G’s potential and bring processing capacity closer to users, forcing another technological shift. This technology, alongside the advances in AI, will be the origin of a series of new products and services that will convert telecom companies into technological partners of other companies in areas as diverse as autonomous vehicles, industrial automation or video games.
We should also mention blockchain, which is being used by telecom companies to transform operations and privacy. In fact, blockchain is being used in telecommunications more than any other sector, according to a 2019 report by the European Commission.
It’s also worth mentioning how other players like Nvidia are also entering the telecom market. This company in particular has a big advantage, thanks to its advances in AI and 5G services, and has become a key partner for telecom companies around the world.
We can’t end this article without looking at the current global landscape of the sector. European telecom companies have demonstrated the robustness of their infrastructure after being stress-tested like never before. Indeed, they have grown precisely because of the unprecedented demand for services in 2020. However, Asia and the United States are competing for the top positions in terms of turnover. China Telecom has the highest market value of all and is worth $309.16 billion. It’s followed by AT&T, which is currently worth $245.58 billion. Both companies have well over 300 million customers between their various services. The first European company appears in seventh place. That’s Deutsche Telekom AG, with a market value of $76.11 billion and more than 100 million mobile customers across more than 50 countries. The huge populations, the size of the national territories, and the low competition in the market give the North American and Asian players an advantage over their European counterparts.
The coming years are full of challenges and exciting projects for telecommunications operators. If they proved anything in 2020, it’s that they are more than ready to take them on.