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M2M Growth: Connecting almost everything in Telecom
By Craig Wigginton, Vice Chairman and US Telecommunications leader, Deloitte and Touche LLP
What does this mean for players in the sector? Carriers will continue to pursue technological advancements to handle demand, including offloading some mobile bandwidth needs to Wi-Fi, which is proving an effective complement to mobile networks. At the same time, long-term spectrum availability, spectrum efficiency, small cells and continued backhaul improvements are likely to be a key focus to assure continued mobile broadband momentum.
Another major marketplace driver is the issue of security. This compasses a myriad of topics, including the threat of increased risks of hacking and malware as the global adoption of mobile devices continues to rise and Machine-to-Machine (M2M) communications gains momentum.
Moreover, increasing popularity of Bring-Your-Own-Device (BYOD) in the workplace could exacerbate the potential exposure to critical company data using malware or other hacking techniques. Reducing the vulnerability of mobile devices to hacking, including embedded anti-malware software into devices and enhanced authentication features, will be a key priority for device manufacturers and wireless carriers.
Connected World Connected Things
As the telecom ecosystem expands, beyond the unending need for broadband access to content and speed, new business models are emerging among both traditional and new players, which could open up markets and change the landscape. Three in particular show near-term promise.
In order to maximize the value of innovation, instead of carriers doing it all themselves, they may want to supplement traditional offerings with more non-traditional arrangements
First, mobile payments technology is certainly at a tipping point, and we anticipate it will gain traction in 2014. The landscape remains fluid as Near Field Communication (NFC) and other technologies jockey for position, but strong growth is nonetheless likely. Second, the spread of communications services into vertical markets is gaining momentum.
Deployed effectively, communications solutions can enhance consumers’ personal and professional lives in realms including education, health care, automotive, hospitality and beyond. Finally, a broad concept to watch in 2014 is “connected world, connected things.” Almost everything has a connectivity element to it—which is what sets the stage for M2M growth. There is vast opportunity to connect almost everything at both the consumer and enterprise levels.
Telecom to Expand Footprint
“All in all, what is fascinating about the telecommunications ecosystem of 2014 is that mobile is on the leading edge of innovation that crosses virtually every industry and sector, and is a key engine of economic growth for the U.S.”
Innovation has been the cornerstone of success in the mobile ecosystem, and companies should keep pushing on the accelerator as many more opportunities exist. For example, new devices will continue to arrive with varied price points and different form factors— bigger screens, flexible screens, curved screens. Mobile capabilities are being extended into completely new devices, including wearable technology such as glasses, smart watches and fitness/ health devices—and these are just the tip of the iceberg. We’ve been seeing indications that the benefit derived from relevant features and functionality, as well as apps, have greatly improved the value proposition to consumers, resulting in increased receptivity in paying more for devices.
Mobile is driving profits and value creation across the industry, but deploying it isn’t cheap. Telecom companies need to invest—expanding their footprint, updating technology and infrastructure, acquiring spectrum and funding R&D. Companies that don’t, or can’t, maintain focus on rapid innovation may lose out to those that do. In order to maximize the value of innovation, instead of carriers doing it all themselves, they may want to supplement traditional offerings with more non-traditional arrangements.
Rather than building a health care competency themselves, for example, they can team up with health care providers through joint ventures, partnerships and other relationships. The same dynamic is possible between telecom and financial services companies, as well as in many other industries.
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