Is Fixed Telecom in Decline?

17 June 2021 | Posted by Nick Oldham

With 5G rolling out across the globe and remote working threatening the enterprise office space, what will happen to traditional fixed telecom? And what does this mean for telecom expense management?

Fixed Line Telecom is in Decline

The market for fixed-line telecoms services is in decline and will continue to decline as faster wireless mobile broadband services become more widely available. These services offer a digital telecoms environment that is better suited to today's mobile, data-intense lifestyle.

Because the truth is that we communicate now more than ever, but we don't use a telephone to do it. The likes of Zoom, Microsoft Teams, and WebEx are taking the place of traditional fixed line solutions.

Over the next five years, we can expect a continued global decline in fixed telecom as enterprises and telcos alike look to mobile solutions.

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Why Does This Matter?

1. Businesses need to sink or swim.

The global shift towards high-speed telecoms technology means that any enterprise that's still underpinned by traditional fixed-line services will fall behind.

If they haven't already, these businesses need to review and overhaul their telecoms infrastructures to maintain a competitive edge. Employees expect more seamless working opportunities. So, organizations need to invest in the technology that meets those needs.

5G, in particular, is opening new doors for businesses. It promises to provide unprecedented, real-time visibility, insights, and control over their assets, products, and services.

87% of enterprises believe their company can create a significant competitive advantage by leveraging advanced wireless technologies.

Deloitte

It can also provide new opportunities to radically transform how they operate and deliver new products and services. And this will have an impact on how telcos build new enterprise-level products.

2. Telcos will change their products and operational models.

With 5G an emerging technology for enterprise, telecoms companies are looking for ways to take advantage of disruption. So, in addition to the traditional playbook of upgrading businesses to new technology, we can expect businesses to take on a more consultative role with enterprise customers.

With their understanding of the technology and the opportunities it presents, they are ideally placed to help enterprise customers gain first-mover advantages in defining and developing innovative business models to disrupt their industries.

This partner-led approach will turn telcos from a simple utilities provider to a trusted advisor in driving new business initiatives.

3. Data usage will continue its astronomic growth.

Fixed telecom might be in decline, but the costs aren't going away. What you would spend on phone bills is now spent on subscription packages to many different collaboration tools, services and software licences. And within these subscription-based bills, there is a lot of data consumed, which comes at a cost.

By 2022, the total enterprise data volume will reach 2.02PB (petabytes). Enabled by their telecoms providers, this data can provide insights that transform businesses and disrupt industries.

And as enterprise networks continue to expand through IoT devices and increased seamless working, the complexity and cost of data will increase too. To balance the costs and benefits of this data boom, enterprises need to redouble their efforts on cost optimization. In particular, we're going to see a change from optimizing mobile contracts to optimizing data packages and SaaS subscriptions.

For an easy example, ask yourself this: does every person on your sales team need a Zoom United Business package for $300 a year? Without a clear understanding of what your teams need and what's included in SaaS subscriptions, global enterprises could be paying far more than they need.

With a heightened focus on cost and process optimization, businesses will need to rely on their TEM vendor to provide greater visibility of their telecom infrastructure to inform decision-making.

What's the Future for Fixed Telecom?

Broadly speaking, fast fibre connectivity to the home or the office will mean employees experience great connectivity wherever they choose to work from in an increasingly flexible working model.

There is also a hugely important role for fixed connectivity to play in providing the backbone for the 4G/5G mobile networks to operate carrying more and more data at faster and faster speeds.

The Complete Guide to Telecom Expense Management

 

Topics: TEM, SD-WAN

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