Nearly every industry suffered significant disruption from the Covid-19 pandemic, and telecommunications was no exception. However, analyst firm Analysys Mason predicts a modest recovery for the telecoms sector in 2021, driven primarily by growth in IoT, 5G and edge computing opportunities.
In its annual forecasts, Analysys Mason reported that industry revenue declined by 2.7% in 2020, equivalent to about $4.3 billion. The firm expects overall revenue to rise by around 1% in 2021 compared with this year’s figures, but cautions that revenue is unlikely to return to 2019 levels until 2023.
The analyst firm expects several important developments over the next 12 months, with the vendor landscape experiencing notable disruption. Some trends will continue from earlier in the year: major cloud providers acquiring telecom-focused capabilities is already underway, reflecting strong demand for edge computing and the strategic role operators can play in that space. These moves indicate that cloud vendors will likely make further acquisitions to expand their telecom-specific offerings.
The outlook for 5G is mixed. Analysys Mason sees significant enterprise potential, noting that few true 5G-based enterprise offerings exist today. The coming year should bring a broader set of 5G products tailored for businesses. In contrast, consumer markets are not expected to deliver any meaningful increase in average revenue per user (ARPU) in 2021.
Operators will also pursue growth through IoT. Disruptive IoT-focused MVNOs and platform providers—those using innovative technology approaches to deliver IoT connectivity—are becoming increasingly important as the mass-market, low-power wide area (LPWA) segment scales. Analysys Mason anticipates that at least one major operator will respond in 2021 by acquiring a specialist IoT connectivity vendor to bolster its capabilities.
The pandemic has accelerated demand in areas where cloud services and connectivity intersect, creating new opportunities for network operators. Sectors such as cloud gaming, telehealth, remote education and business cloud services will benefit from closer integration of cloud and network capabilities. Edge computing will play a central role in many of these cases, with operators positioned to offer edge cloud resources that improve latency and user experience for services like cloud gaming.
Interested in industry discussions on these topics? Consider attending one of the co-located technology events that bring together leaders and practitioners across 5G, IoT, blockchain, AI, big data, cybersecurity and cloud. These conferences regularly take place in technology hubs such as Silicon Valley, London and Amsterdam and provide forums for exploring how operators, cloud providers and vendors are shaping the next phase of connectivity-driven innovation.