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2022 telecoms predictions: Broadband prices to rise

By , ITWeb senior news journalist.
Africa , South Africa , 06 Jan 2022

In 2022, major telecoms firms across the globe will face more stringent regulatory policies and broadband prices are expected to rise, as operators face difficulty in creating value for their shareholders.

These are some of the 2022 telecoms predictions made by independent consultancy Strand Consult, which reviews the highs and lows from the mobile telecoms industry in 2021 and makes predictions for 2022.

According to the consultancy, this past year developed very differently from other years, but was not so different from 2020.

In 2020, it was an understatement to say that COVID-19 was a game-changer in the telecoms sector. As a result of the pandemic, communications networks built and run by operators across the globe have become more important than ever, according to Strand Consult.

Strand Consult’s 2022 telecoms predictions

Rising broadband prices

Both mobile and broadband prices have fallen over time, but 2022 should be the year when prices rise around the world. Look no further than Denmark, which in 2021 found the telecoms regulator colluding with energy companies to price-fix the wholesale price of fibre access at levels above what the market offers.

As such, prices are guaranteed to rise in Denmark and other European countries because of regulators’ efforts. Given that the regulated price of fibre will increase, broadband prices on private networks will follow.

Strand Consult expects that many of the operators that have difficulty creating value for their shareholders through organic growth will raise prices in 2022. This is the law of demand, and without price increases, it will be difficult to invest in network upgrades.

China, Huawei face a difficult 2022

When Joe Biden became US president in January 2020, many wondered how US policy would change in relation to China and Huawei. Strand Consult maintained that the policy was unlikely to change, and if anything, could be toughened.

Strand Consult believes this year, Huawei will continue to face significant financial pressure, and public opinion about Huawei is not expected to change anytime soon.

Many countries see it as unsafe and unsustainable to use Huawei equipment in telecommunications networks. Some operators have experienced increased reputational and regulatory risk by using Huawei, and corporate customers do not want their sensitive and valuable data to be vulnerable to the Chinese government.

It will be a hard sell for Huawei to convince public sector buyers in the US and Europe to buy its solution of putting data into Chinese IT systems and the Chinese cloud.

The cloud explodes in 2022

Policymakers will turn their attention to the privacy issues relating to the public cloud – which hold an increasing amount of citizen and enterprise data. In 2022, cloud services from Amazon, Microsoft and Google will emerge in the public consciousness as mobile operators store parts of their networks in their data centres.

As mobile networks are increasingly integrated with clouds, this means individuals and firms are even more embedded with ‘big tech’. There is no turning off big tech and no choosing not to use it.

This adds to the complexity and difficulty of data portability from one cloud to another – as such, companies may find it impossible to migrate from one cloud to another.

This will continue to set off alarms in the anti-trust world, raising further questions about the protection of consumer data.

Market for private 5G networks crowded

In 2021, much was written about private 5G networks: Who will build and who will run them? It's a market in which many want to enter; everyone from mobile operators to IT companies to system integrators to infrastructure suppliers. OpenRAN players also want to enter, though it remains to be seen if they can deliver the heavy demands of a classic mobile network.

In 2022, Strand Consult expects fierce competition, very low margins and an inevitable shakeout in the private 5G market.

Tower companies spread in the value chain

Tower companies are an important part of the efforts to find profitability in an increasingly difficult telecoms market. Many mobile carriers have discovered they can sell off their towers and post unrealised assets. In Europe alone, it has contributed over €36 billion to the mobile industry.

Around the world these tower companies have started to spread in the value chain. During 2022, we will see much more of this.

The trend of the breakup of telecoms companies into infrastructure and service entities will also increase in 2022, according to Strand Consult.

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