The migration from traditional voice to new IP based technologies and services – alongside a data explosion and increasing consumer data capacity demands – brings massive disruption to the telecoms arena. For carriers, it signals a shift in not just technology but revenue models and competition. It's changing their product and service offerings, and exposing opportunities to engage in new ways with second tier providers, Over the Top (OTT) partners, and directly with customers. But a triple change imperative – across tech, strategy, and ops – is essential for their survival ... and it is a challenge to keep up.

To remain relevant, carriers must invest in new technologies that do not deliver the margins that voice services did. It's forcing them to take new variables into consideration and embrace new strategies.

What drives growth in data consumption?

The adoption of the latest wireless technologies, such as 4G and 5G, as well as broadband fibre networks will be essential to provide high volume services.

4G technology was the first real driver behind true mobile broadband connectivity and a driver of data capacity requirements. It brought users converged services that include multimedia content, cloud-based applications and big data analytics capabilities. 5G technology will ease the burden, offering better speeds and longer battery life but, perhaps most importantly, higher network capacity and better resource utilisation. This makes the move to 5G technology an essential consideration to service growing demand and a growing base of customers and Internet of Things (IoT) devices.

5G networks are only expected to start emerging in 2020. Nonetheless, current 4G standards and the ramp up to 5G are driving the adoption of wireless broadband in a cell environment not serviced by fibre or Wi-Fi services. As more and more clients demand wireless "connected anywhere" services, the need for constant technology upgrades to high speed and high data capacity services will grow. At the same time, increases in the efficiency of computing power and higher bandwidth, lower latency solutions, will give rise to new services such as augmented or virtual reality services, remote tele-medicine and remote touch sensing, to name just a few.

While drivers for adoption of advanced, high capacity technology and services remains low in rural areas in Africa, it is likely that isolated deployments by governments and non-governmental organisations for essential services, such as telemedicine of education, will create islands of uptake that will grow rapidly.

How big is the requirement for more capacity and how rapidly will it escalate as new IP-based services are developed and adopted? Our daily per capita data consumption is expected to soon exceed 1 GB of data – and its expected to grow exponentially at least for another five years.

That is going to put a lot of pressure on carriers to continuously improve infrastructure, and maximise usage and data volumes to achieve better returns.

Optimising network utilisation

To keep up, carriers will need to place more and more emphasis on keeping infrastructure current and relevant through continuous upgrades to the newest technology. Network resilience and alternate routing over load sharing multiple transmission paths becomes essential in a modern telecommunication network. Achieving this comes down to network architecture and making use of technologies that are more intelligent, software-defined and automated. This implies a change in the skillset employed by the carrier as network engineers need to be able to exploit new planning tools and design principles to support and maintain networks.

But infrastructure is likely to commoditise. As first mover advantage on fibre deployments and other service offerings begins to dissipate, infrastructure sharing and collaboration on deployment of expensive infrastructure such as radio masts and fibre ducts are becoming important considerations for service providers. Indeed, as infrastructure commoditises, competitiveness will be increasingly determined by service levels, quality of service and product mix, rather than size or ownership of the network.

For governments, there is also great incentive to encourage infrastructure sharing. Countries are getting legislators involved in making it mandatory in order to drive speed of infrastructure deployment, and manage down the cost of administration, which in turn will lower the cost of telecoms and further drive uptake.

To maximise revenue and build sustainable business models, networks need to optimise utilisation and have the ability to scale seamlessly as client acquisition increases. This is giving rise to new partnerships.

OTT players, such as Google and Facebook, are disruptors, yet partnerships with these players will allow carriers to increase data volumes on their networks and to maximise capacity. OTT players effectively provide entry points for consumers to participate in the digital economy, helping grow the subscriber base. New carrier strategies will emerge that enable them to maximise potential returns.

How is enterprise managing the data explosion?

For enterprises, technology is less of a concern than cost/benefit equations. Businesses want to get away from large, fixed capex expenditure that they are unlikely to recover. This is driving the shift to cloud computing, which is a convenient, scalable operating expense. As long as the cost benefit remains, cloud computing will grow. This will drive the proliferation of data centres. Already investments in data centres by major players – carriers as well as OTT players – are growing as providers realise that these services need to be brought closer (physically) to the customer to maximise quality of service and use of infrastructure.

Can carriers retain their market position?

The current telecoms market disruption is unprecedented. We are seeing the birth of a new industry – one that is far more inclusive but also more facetted and complex. While technology seems to be leading the way and providing carriers with a competitive advantage, the ability of carriers to strategically partner and leverage new opportunities may provide the ultimate long-term advantage.

As consolidation continues in local and global markets, it seems that multi-national players are faring better – with a bigger and more diverse market, they are able to experiment with a broader spread of offerings and access a greater selection of partners. There is no doubt that the data explosion will continue, as will consumer appetite for new and differentiated services. Carriers will need strategic and tech smarts, as well as considerable stamina to stay the course. Those that do will emerge as players in a very different landscape – one that is just starting to come into view.

By Eckart Zollner, Business Development Manager at New Telco SA.