Telecom Predictions 2008
By CXOtoday Staff
Mumbai, Jan 28, 2008 1406 hrs IST

According to IDC's 'Asia/Pacific (excluding Japan) Telecommunications 2008 Top 10 Predictions, Doc # AP201216P', 2008 will be a year where telco providers continue to experiment with various business models in order to find an optimal balance between creating and sustaining demand and maintaining positive financial returns. "The new media sector and corporate users' preference for on-premises solutions have been disruptive to the APEJ telecom industry in the past few years. To stay on top of the market, telcos have been experimenting with various go-to-market offerings, partnerships, solution developments, and network investments models. However, not all experiments generate immediate financial benefits. As a result, telcos are under pressure to find a balance between continual innovation and ensuring positive financial returns in the immediate term from 'cash cow' offerings." says Sandra Ng, group vice president for IDC's Asia/Pacific communications, peripherals, services and ETAS research. The Asia/Pacific (excluding Japan) telecom services market was worth over US $216 billion in 2007. In terms of infrastructure, the networking equipment market grew 13% to US $6.6 billion in 2007 while the carrier segment remained a stable market at US $32 billion. Growth from broadband, IP-based and 3G services, and demand for on-premise solutions will further propel the services and infrastructure markets in 2008. Drawing from the latest IDC research and internal brainstorming sessions between IDC's regional and country analysts, the following represents IDC's high-level look at trends, vendor and service provider strategies, as well as new technologies that are expected to have an impact on the industry and its players in 2008. IDC's top 10 predictions for the telecommunications market in APEJ for 2008: * Adoption of multi-media applications becomes a reality with 802.11n Enterprise adoption of WLAN is expected to become a reality when 802.11n is ratified in 2008. The 802.11n standard removes obstacles that have previously impeded enterprise-wide adoption of WLAN and is expected to pave the way for larger scale deployment. In addition to better security, bandwidth and range, 802.11n makes the seamless delivery of unified mobile applications a reality-something that the current combination of wired and wireless networks has problems tackling. Given its technological strengths, IDC expects greater usage of multi-media applications such as video conferencing, IPTV, video on demand, multi-room DVR, and voice over WLAN. * Streaming services- A silver mine for mobile operators Data streaming has been around for a while, but its performance on GPRS and 3G networks has been too slow and too inefficient. The arrival of HSDPA, which could deliver speeds of 3.6Mbps or greater, breathes new life into music and video streaming. It also brings mobile TV into reality. Streaming services is expected to enhance operators' revenues as long as tariff plans are simple and content has appeal. * All-IP mobile (core) network: the market is ready GSM operators who do not have a 3G license and are looking to roll out next generation wireless data services are expected to migrate their mobile switching center, base-station controllers, customer care and billing systems, SMS and other value-added voice services to an all-IP core. As an all-IP mobile core network gives operators flexibility in scaling up to new bandwidth-hungry applications while preparing for a future 4G-network design at the same time, IDC expects more APEJ operators to migrate to an IP core in 2008. * Mobilizing the digital marketplace-the role of mobile operators The introduction of HSDPA combined with the popularity of blogging, video sharing and social networking (such as YouTube and Facebook) in the fixed world create opportunities for mobile operators. Mobile versions of various Web 2.0 applications will accustom subscribers to use their mobile phones for communications and social networking purposes. As users become more comfortable and more compelled to use their phone to access the Internet, operators are posed to gain from greater data usage. Most Asian carriers recognize that creative content development could lead to enhance revenue. As such IDC expects operators to be very active in developing and pushing mobile 2.0 applications in 2008. * Opportunities come in verticals It is no secret that highly customized service brings higher premium. As such, the telecommunications industry has been placing great emphasis on delivering tailored solutions for various industry verticals. Consumer habits, growing affluence, longer life expectancy, and favorable macro-economic environments are just a few factors that led IDC to believe that over the next few years, gaming, healthcare, hospitality, off-shoring and retail sectors in APEJ hold great potential for telcos. * Communication services go green Not only do environmental issues influence how people vote, they have also become a growing business concern in APEJ. Factors that are driving IT managers to adopt "green IT" are many-cost savings, genuine concern for the environment, and the need to demonstrate corporate social responsibility. IDC believes that server and datacenter consolidation will be one of the immediate focus points of the "greening" of IT. Video conferencing is another area that will become increasingly popular as it resonates well with "green IT". IDC believes that we are only at the very beginning of this movement. Enterprises will increase pressure their partners and suppliers to provide "green" solutions, not only for the purposes of meeting environmental compliance regulations, but also from genuine concern for the environment. IDC expects more green initiatives in 2008 and beyond. * The "nine lives" of wireless local loop Fixed-line penetration remains low in a number of largely populated markets such as India, Indonesia, Vietnam, Bangladesh, Cambodia and the Philippines. In spite of the wild success of GSM mobile services, there remains significant pent-up demand for WLL services as the pricing of GSM service makes frequent calls unaffordable to many. IDC believes that we will see WLL becoming more popular in certain markets as operators use the technology to offer unlimited voice calls that resemble services offered by landlines/residential phones. * Feeling secured with IP surveillance With Beijing currently in the process of deploying IP-surveillance solutions as part of the 2008 Olympics security plan, 2008 is set to be a big year for IP-surveillance. IDC believes that businesses will be receptive to IP surveillance due to increased security concerns, as well as IP surveillance's cost effectiveness. This emerging technology will become popular in the gaming, financial services and retail industries, as physical security is a primary concern to these industry verticals. * Unified communications (UC) and Web 2.0 come together to accelerate uptake of enterprise collaboration As the gap between personal and business communication narrows, there is an emerging focus on web 2.0 and UC solutions for the enterprise. IDC believes that enterprises will move beyond UC and start embracing Web 2.0 with a focus on collaboration, customer analytics and targeted smart search applications in 2008. The need for constant presence, information and more effective communication and collaborative workflows are factors driving the adoption of UC and Web 2.0 applications at the workplace. IDC believes that 2008 will be the year where these services will truly gain traction in the enterprise space. * The tale of two technologies: HSPA for 3G carriers vs mobile WiMAX for 2G carriers and wireline providers The APEJ market comprises of countries that have moderate to high broadband household penetration and those that have large swaths of the households unconnected to the Internet or even Plain Old Telephone Services (POTS). Wireless broadband technology is a cost-effective solution that could address the demand for connectivity in these markets. IDC predicts that WiMAX and HSDPA will cooperate and compete for market share in the fixed, portable and mobile broadband addressable space with HSPDA being the winner for mobile broadband at 3G carriers, mobile WiMAX for mobile broadband at 2G carriers and mobile WiMAX in fixed service mode for fixed-line carriers. Related Links: WiMAX Steps Forward in India WiMAX: The Next Revolution