What’s in store for the American telecoms industry?
Today, US citizens will look at their devices more than eight billion times. With more than 265 million mobile users, the American telecoms market is growing rapidly. Consumers are using their devices to watch videos, play games, socialise, manage their money, shop and much more. As smartphone capabilities continue to increase, they mark a major opportunity for players in the telecom industry, writes Kurt Simmons the vice president of communications, North America at Cyient.
Connectivity is increasingly enmeshed in the fabric of today’s digital world and is driving the momentum behind video streaming, mPayment, and the Internet of Things (IoT). Device manufacturers, wireless, wireline and broadband carriers and network equipment and infrastructure companies are all important components of this ecosystem. New products, embedded devices, and services are in constant demand, as is reliable and swift network connectivity. To this end, the industry has seen major investment activity in fibre deployments, HFC technology upgrades, and mobile broadband networks to respond to the increasing consumer expectations for faster and wider availability of services.
So, what does the future hold for the American telecoms industry?
Respond to demands for mobile connectivity
At present, the major focus for US carriers is providing data and voice services for consumers that are reliable, affordable, and high quality. Data usage, particularly via Wi-Fi, has been growing dramatically globally, largely due to the quality and volume required for streaming services. By 2021, this is expected to increase by five times in North America and is only set to continue on that trajectory. The industry faces a huge challenge in deploying services that can keep pace with this.
As a result of this demand, US telecoms companies are starting to look at alternative network strategies to better manage coverage, capacity and quality. Many operators are moving away from proprietary, hardware-based equipment towards software-centric functionality that will enable them to more efficiently and effectively manage their networks.
The rise of IoT and cross-sector collaboration
With US telecoms companies looking to improve their capabilities in existing services, there are opportunities to expand into new areas. As the IoT increases and the number of embedded devices requiring mobile connectivity grows, there is a bigger opportunity for telecoms companies to forge alliances and partnerships in industries such as retail, automotive and healthcare.
IoT will continue to diversify and connect more ‘things’, enhancing our smart homes and cities, wearable devices, surveillance technologies, driverless and connected vehicles, trains and planes. Parking stations recognise our cars and retail outlets respond to shoppers’ activities with offers streamed to their mobiles. In addition, municipal bodies are seeing considerable benefits in monitoring and managing lighting, traffic flow, security and assets through cloud-based technologies. Each of these areas represents an exciting and potentially lucrative opportunity for the telecoms sector to expand into.
The rural challenge and launch of the Connect America Fund (CAF)
As part of the drive to subsidise services in rural and remote areas, the Connect America Fund was initiated in 2013, when five companies accepted US$255 million in funding for the first CAF round. This was followed by the second round of funding (CAF-II) when ten carriers accepted a total of US$1.5 billion in funding for the second phase, which is progressing now. The fund was launched to bring high-speed broadband services to an estimated 23 million Americans in the rural, under-serviced areas of the country.
The US government also injected considerable funds into under-serviced and less-connected sectors, spending US$23.7 million from the E-rate programme’s funding for Wi-Fi as well as US$1.1 billion for broadband services to schools and libraries in 2015. These funds are sourced partly through a fee charged to providers, with the benefits of the infrastructure to these areas far outweighing this contribution.
Consumer thirst for faster and high-quality streaming services is putting a strain on existing infrastructure but this opens up avenues for US telecoms firms to develop new services, particularly around software-centric functionality. Combine this with the rise of the IoT opening new doors to a range of sector partnerships and the US government’s commitment to improving its rural infrastructure and the future looks bright for the telecommunications market. However, these opportunities will come with their challenges, and it’s vital that telecoms organisations work closely with third party organisations at the cutting edge of technology development and deployment to realise this future.