Pyramid Research expects anemic growth in traditional telecoms service lines in 2016 with internet, technology and IT firms continuing to be a major disruptive force via innovation, investment and asymmetric regulatory conditions.
Pyramid Research predicts worldwide revenue from fixed, mobile and pay-TV services to remain flat in 2016, welcome news after a tumultuous year that 2015 was with a weak macroeconomic environment and significant currency devaluations. The New Year will offer stronger-than-ever opportunities to monetize digital transformation investments for telcos thanks to growing consumer appetite for bundles of services and content and enterprise need for streamlined operations, greater mobility and increased customer value.
According to Pyramid’s ICT Predictions report, telcos will see a significant upside in smart home, insurance, automotive and security sectors, and greater usage of cloud services, M2M/IoT solutions, and mCommerce solutions in enterprise markets in 2016 worldwide. Internet giants including Google, Amazon, Facebook and Apple will give telcos a run for their money in these greenfield domains however, as they continue to pioneer the digital wave – that is, identifying and moving into new digital domains which are not necessarily yet on telcos’ radar.
Highlights from Pyramid’s ICT Predictions include:
- 2016 will be the last year when fixed service revenue will decline over our 5-year forecast period. Service bundling and convergence services as well as increasing availability and affordability of broadband services and higher bandwidth broadband connections are turning the tide for telcos.
- India will account for roughly one-fourth of all mobile net additions in 2016, and together with China, US, Nigeria, DRC and Myanmar will represent 52% of all subscriptions added worldwide during the year.
- 2016 will be a pivotal period for the global IoT industry when leading MNOs will start commercializing NB-IoT solutions to accelerate the adoption of IoT services, by making it more efficient to connect things in areas hard to reach or that require a long battery life.
- Africa will see new, regional players emerging in 2016 owing to the expected M&A activity during the year that will be motivated by spectrum acquisition and consolidation.
- The M&A activity in Mexico and the US should continue in 2016, with Televisa, Movistar and AT&T all looking for assets in Mexico and America Movil in the US that can accelerate the availability of quad-play offerings as well as cross-border synergies.
- Most European telecoms markets will either return or get close to revenue growth in 2016. Operator and investor’s confidence on the outlook of the European telecoms industry will improve as there is clear evidence of revenue stabilization/return to growth after several years of top-line pressure.