Accelerating digital capabilities and building resilience in a fast-evolving and competitive market is paramount to long-term enterprise growth. Across the board, business leaders are navigating emerging technologies as a force multiplier to scale their digital ambitions and seize new opportunities in a changing landscape. Here, we identify some significant tech trends that will shape telcos.
According to Fortune Business Insights, the global market for digital twins is projected to grow at a compound annual growth rate of 39.9% to reach US$72 billion by 2028. While digital twin technology is not new, it is gaining traction beyond manufacturing, across industries including healthcare and agriculture. For instance, the pandemic has led scientists to use advanced modeling and prototyping of digital twin technology to detect patterns in diseases and identify remedial treatments.
Cities are also relying on digital twins to achieve cost savings in energy and utilities, with ABI estimating as much as US$280 billion in global cost savings by 2030. It is also used to improve urban living conditions. For instance, Shanghai uses digital twins to allow urban planners to gather predictive data on floods and traffic conditions. In Singapore, a grid digital twin that provides real-time virtual representation of the physical power grid assets and network builds the nation’s grid resilience and supports cleaner energy deployment.
For operators, the benefits of digital twins include real-time site inventory and predictive maintenance. It can help address the increased complexities of networks when IoT and 5G deployment proliferates, raising operational efficiencies when deploying network optimization, and facilitating understanding of business processes and customer behaviors.
There are also opportunities to seize in the vertical market. For instance, through digital twins of their towers, sites and network, operators can share their gathered data and insights as a service to monetize.
Metaverse is the new buzzword for three-dimensional virtual spaces where individuals come together via avatars to interact in environments mirroring the physical world. A disruptive tech perceived to be the next iteration of the Internet, metaverses open up possibilities to a virtual economy just as important as the physical economy, where cryptocurrencies and non-fungible tokens (NFTs) are exchanged.
While metaverses are still in their infancy, dominated by small metaverses that have yet to make a very significant impact, the market is growing steadily. Global metaverse transactions is estimated at US$6 billion last year, according to research firm Strategy Analytics, and projected to reach about US$42 billion by 2026. Seizing opportunities in metaverses are entertainment and gaming companies, as well as retail brands, using extended reality (XR) to create truly immersive experiences. Tech giants like Apple, Google, Microsoft and Facebook are also investing in metaverses. And in China, hype on metaverses led more than 1,300 tech companies to register metaverse-related trademarks in December 2021. But that is not all.
As metaverses have very high requirements for bandwidth, storage and computing, telecom operators can step in to play the important role of supporting metaverses infrastructure, as well as expanding offerings in AR and VR.
According to research from Consumer & IndustryLab, the use of 5G in metaverses is estimated to help operators fetch revenue reaching US$712 billion by 2030.
Last May, South Korea launched an alliance comprising 17 tech companies and 8 industry groups to develop metaverse-related technologies and ecosystems. SK Telecom has since launched Ifland, a metaverse platform designed to deliver optimal user experience through virtual spaces and avatars. According to the operator’s vice president Cho Ik-Hwan, “The metaverse is our future business model. It will be our core business platform.”
Hailing metaverse as the third-generation Internet, China has also established the nation’s first approved metaverse industry association, of which China Mobile, China Telecom and China Unicom are amongst its members, to promote healthy and rapid development of the metaverse industry. Leveraging on China Telecom’s cloud and product content capabilities, for instance, its cloud gaming and entertainment subsidiary plans to launch an integrated metaverse platform to serve all types of virtual worlds.
Also looking to monetise 5G through metaverses, Verizon Communications has embarked on a metaverse treasure hunt to demonstrate its 5G performance.
Hybrid cloud, multi-cloud and edge computing
Cloud strategies are becoming the essence for retrieving valuable data insights and enabling remote work as digital infrastructure resilience becomes a priority in the wake of the pandemic. Gartner predicts that overall cloud spending in the Asia Pacific will exceed the rest of the world, reaching US$200 billion by 2024, with investments growing at a compound annual growth rate (CAGR) of over 20% since 2018.
There is no one-size-fits-all when it comes to adopting cloud strategies – it all depends on the organisation’s infrastructure needs, security, workloads and more. While every cloudification journey is different, the shift to cloud has infiltrated all layers of tech stack, namely applications, infrastructure, platforms and services.
With focus shifting to post-pandemic growth, businesses are embracing and optimising a mixed public and private cloud environment to reap the benefits of increased scalability, faster time to market, lower costs, reduced risk and enhanced customer experience. With a multi-cloud strategy, organisations can select the cloud service offering the most benefits to reap the greatest value. However, operating across different cloud services is not without its challenge. The key is ensuring interoperability.
According to Allied Market Research, the global telecom cloud market is projected to reach US$125 billion by 2030, growing at a compound annual growth rate of 21.8% from 2021 to 2030. Of which, public cloud amounted to two-thirds of the total market in 2020.
In the industry, where operators need to adhere to compliance regulations and carry personal data, hybrid cloud environments are chosen to ensure that sensitive information is located on-premise. During the forecast period, the hybrid cloud segment is estimated to grow the fastest, at a CAGR of 24.7%.
To unlock the potential of 5G and IoT markets, both hyperscalers and telcos want to build capabilities to capture enterprise value at the edge. In the region, Singtel and Optus have partnered with AWS to deliver 5G solutions to enterprises on the edge. Indosat Ooredoo has also partnered with Google Cloud to target Indonesia’s small- and medium-sized business (SMB) through 5G edge computing solutions. Working with hyperscalers provide these operators the scalability to support and grow new revenue stream in a more sustainable way.
Zero trust security adopts a “never trust, always verify” approach to enhance security. This means that all users, whether within or outside of the organisation’s network are verified, approved and constantly checked for security. Since organisations cannot eliminate cyber threats, which have been on the steady rise, they can protect the network and its resources by removing implicit trust.
As organisations embrace cloud infrastructure, more cloud vulnerabilities are exposed. A zero trust framework protects digital environments, using network segmentation to manage the risks in a hybrid cloud environment to mitigate threats. Essentially, zero trust security addresses threats by performing repeated verifications, minimizing the damage in the event of a breach and automating prevention and detection.
According to Gartner, up to 60% of VPNs – with a market value between US$25 billion and US$40 billion – will be replaced by zero trust solutions by 2023. Last October, Singapore’s government is the first in Asia to launch a new cybersecurity strategy using the zero trust approach to strengthen its cybersecurity posture and protect public services applications and IT systems.
A big target for cyber attacks, the telecommunications industry is in a strong position to benefit from a zero trust architecture. With all the assets necessary to capture value from managed services, there is also a burgeoning market for operators to provide managed zero trust services, For instance, CITIC Telecom started partnering with zero trust provider Zscaler last year, to keep client data, networks and applications safe.
Fixed wireless access
Growth in 5G will fuel fixed wireless access (FWA) deployments and provide new revenue opportunities for operators. This trend will also be fuelled by consumers and businesses as digital transformation drives the need for broadband connectivity.
According to Ericsson, 77% of global service providers had a FWA offering as of October 2021. By the end of 2025, it is predicted that FWA connections will grow threefold to 160 million to account for one-fifth of global mobile network data traffic. In the Asia Pacific region, where a wide digital divide dominates, the ability for FWA to deliver internet access economically to underserved markets makes it an attractive solution. In many developing countries, governments are making increased broadband connectivity a national priority to promote digitalization efforts and economic recovery. This trend will likely generate more interest next year.
In addition, FWA is becoming one of the leading use cases for 5G to help operators monetize on 5G. As 5G FWA complies with the 3GPP, an equipment vendor ecosystem will grow to in turn create supporting equipment at scale, at lower costs for operators’ use. Verizon for instance, plans to cover 2 million business with 5G C-band FWA. In Southeast Asia, Globe Telecom is the first operator in Southeast to launch a commercial 5G FWA service.
These trends tell us that technology is the way of the future. They also point the way to optimization and monetization to ensure future growth. With technological advances disrupting all industries, transformation and innovation must be an ongoing process to deliver impact.