The telecom industry has been going through rapid changes. The advancement in technology and the rise of new platforms such as WhatsApp, Skype, and Facebook have drastically reduced the traditional profits earned by telecom companies from voice calls and SMS. In this digital era, companies in the telecom industry are fighting hard to prevent themselves from becoming mere data channels. One way out for players in the telecom industry is to build up an open platform that can attract participation from hardware providers, end device suppliers, content developers, and end-users. To stay afloat, the telecom industry companies must adapt to the changing needs of the customers. Failing which they will find themselves threatened by other players in the market who will grab the opportunity. Furthermore, in order to maintain their revenue stream, telecom companies must identify new and innovative solutions whilst providing customers with the existing key services. Here are some fresh challenges that companies in the telecom industry will have to endure this year.
Increasing Financial Overhead
Today, telecom companies have millions of subscribers, a variety of new products, and bundled and customized solutions. This makes the operational support services like order fulfillment, customer care, service configuration, and billing increasingly complex. Ergo, the cost of handling these operations require resources and different tools, thus, increasing the financial overhead.
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The rising rate of security threats powered by new technologies has become a major concern for operators in the telecom industry. So, several operational and technical innovations are needed for telcos to meet customer expectations of complete system security from the network till the device level. Furthermore, telecommunication providers need to make upgrades to their IT and connectivity infrastructure and focus on providing data and voice services that are high quality, reliable, and affordable.
Competition from OTT Services
OTT services, especially in the case of messaging apps, have been stealing a great deal of revenue from telecom companies. Due to this, the average revenue per user (ARPU) of telecom companies has seen a declining trend throughout the past decade. If this trend continues, chances are that the SMS services provided by telecom companies will soon completely shut shop. Also, OTT providers are starting to provide voice call services, which makes the problem even more significant for players in the telecom industry.
Impact of IoT
Another important telecom industry challenges to be prepared for this year is the rise of Internet of Things (IoT), which is leading to the explosive growth of the connected devices market. This is putting telecom companies in trouble as the integration of IoT requires a greater level of connectivity and data flow from the underlying platform. It becomes highly challenging for firms in the telecom industry to develop a functional platform that can support such IoT ecosystems.
5G technology is expected to roll out by 2020, and it comes with an array of advantages for both users and the providers. But interestingly, 5G technology is also one of the biggest challenges that companies in the telecom industry are going to face. This is because even non-telecom companies are slowly planning to venture into this technology. Also, numerous players in the telecom industry are still catching up with the 4G technology as they are still stuck with 2G and 3G technology.