What is trending in telecom in 2015?
What can I expect in telecom in 2015?
How will telecom affect my business in 2015?
In this post, the fifth in our Telecom Tip Tuesday segment, we will be talking about the trends in telecom that we think will dominate in 2015. Although mid-February might be a little late for discussing trends for the coming year – well, six weeks late – some aspects of the year in telecom are just coming into focus, so we thought it is actually a great time to talk about them.
Apple announced their quarterly profits last week, and one item that was lost in all the hubbub of Apple being the most profitable company in recorded history was this little nugget – it appears that iPhone 6 owners like Apple’s new mobile wallet system. And they like it a lot.
It does appear that Apple has done it again. They have come to an existing party (think of MP3 players, smartphones, and tablets) with a solution that actually has the potential to revolutionize the way we pay for things. Several other ventures, including Google, have tried this, but it looks like Apple will be the one to actually succeed.
For small and medium-sized businesses, this means that there may be a mobile payment system they can actually get behind. The great thing about mobile payments is that they not only give customers a new and convenient way to pay, but it opens up entirely new channels to market products. Especially businesses that have (shameless self-promotion) custom mobile apps.
We published our own post on the Net Neutrality debate last week. Our analysis is that the FCC position on the debate is a good compromise that will protect consumer and industry rights while not burdening the Telecom industry with unnecessary regulation and fees. However, the debate is not likely to be over anytime soon.
First, the FCC has only published a proposal, which is only the first step in the rule-making process. There will likely be a period of about six weeks where the FCC will take comments on the proposal before they publish a new rule, and it is shaping up to be a very boisterous comments process. In addition, the current proposal is almost identical to a set of rules that was overturned by an appeals court last year, and the large ISPs have been very willing to spend money on this debate.
We believe that the current proposal will probably survive as a rule without too much change and that is pretty good news for businesses who depend on an open internet to serve their customers. However, it will be a process to watch and plan for.
Over the Top Television (OTT)
This trend is highly impacted by the outcome of the Net Neutrality debate. Over the Top Television (OTT) refers to the practice of streaming TV over the internet using services like Netflix, Hulu, Roku, Apple TV and YouTube rather than buying packages through Cable providers. At the end of 2014, there were a few new options for consumers, with offering from HBO, Showtime, Sony and CBS among other. Early this year, Dish began selling a new service called SlingTV, which is offering no-contract unbundled channels from ESPN, TNT, TBS, the Food Network, HGTV, the Travel Channel, CNN and ABC Family for $20 a month.
In particular, unbundling Sports packages from Cable packages has been the “holy grail” for OTT and will definitely accelerate the trend this year. As this trend expands, cable and satellite providers are going to have to work a lot harder to convince customers why highly bundled pay-TV still makes sense. The tie-in to Net Neutrality is that that accelerating trend in streaming video is going to require more bandwidth from ISPs who won’t be able to charge fees to content providers. As the competition heats up, it is likely that a different pay model may emerge or connection rates will start to rise.
The telecom landscape is constantly changing through mergers and acquisitions. In the last few years, the merger list included Verizon, Vodafone, Sprint, SoftBank, Cricket, T-Mobile, Level3, Time Warner Telecom, MetroPCS, Xfinity, Greatlands, AT&T, U-Verse, TWC, Charter and Comcast. In 2015 there are two mega-mergers that are waiting for regulatory approval. Comcast is hoping to purchase Time Warner Cable (although this deal might not get regulatory approval) and AT&T plans to purchase DirecTV. As with previous mergers, the carriers struggle to maintain their brands while consumers struggle to remember who purchased whom and what services they are marketing. In addition, the entire telecom industry suffers from a lack of trust and these mega-mergers only stir the pot further.
From a business standpoint, it’s not entirely clear that these mergers have any effect on services except to note that large mergers involve integrating different systems and that typically leads to some support and billing confusion. Throughout the last 12 years, Opticom Consulting has helped our clients weather quite a few telecom mergers, so we have the experience to navigate the ins-and-outs of carrier confusion.
Internet of Things (IoT)
The Internet of Things (IoT) refers to the trend of connecting our homes and appliances to the Internet to manage our environment, turn lights on and off, monitor our security system and even have our refrigerator tell us we’re low on milk. This trend has been gaining headway for a few years, but we believe that the big breakthrough this year is going to be in connected cars. If this year’s Consumer Electronics Show was any indication, manufacturers are racing to make your in-car entertainment experience rival the one in your living room. This year, three giants – Microsoft, Google and Apple – have announced their connected-car platforms.
For businesses, the IoT brings opportunity not only to conduct business differently (such as connecting home workers), but to find new ways to reach out to customers as the various platforms emerge. In addition to providing new avenues for advertising, these new connected platforms can conceivably give consumers new ways to search for and purchase products and services, either through browser-like interfaces or through custom applications (such as apps in the app store).