ABI Research conducted a survey to understand the preferences of technology implementers using B2B technologies and found that 55% of respondents prefer to use telecommunications companies solely for connectivity.
Dimitris Mavrakis, Research Director at ABI Research, commented: “The connectivity market remains and will continue to be profitable for many telcos worldwide, but our survey shows that some technology implementers are interested in more than just connectivity. We call this trend Connectivity+.”
Thirty-one percent of those surveyed showed a preference for Connectivity+, where telcos bundle value-added, industry-specific services on top of basic connectivity. Only 13% of respondents expect telcos to build entirely new ecosystems that cover IoT, data services, IT, and cloud offerings.
The research also predicts a decline in the use of telcos for cloud-computing services: current usage stands at 4% but is expected to fall to 1% over the next five years. Conversely, use of hybrid cloud—currently reported by 12% of respondents—is projected to rise to 38% within the same timeframe. The survey concluded that telcos are unlikely to compete successfully with web-scale companies in the cloud-computing market.
Mavrakis added: “Verizon has successfully divested parts of its cloud business, and other Tier One telcos are likely to follow. Competing directly with web-scale companies in their core markets is not feasible for telcos. At present, implementer needs and telco strategies appear misaligned. For example, many telcos are targeting the automotive sector, while our survey shows strong demand for telco services in retail, government, and logistics.”
In a related analysis, SNS Research reports that mobile operators are expected to invest more than $21 billion in standardized 5G New Radio infrastructure by the end of 2025, reflecting a compound annual growth rate of around 70% between 2019 and 2025. In addition, more than $7 billion is projected to be invested in NextGen core and transport network infrastructure. Mobile operators and vendors are pursuing various R&D initiatives to develop 5G networks, with the first standardized deployments expected to reach commercialization by 2019 and an implementation-ready version of 3GPP’s initial 5G specifications anticipated by March 2018.”