There was a time when “the gold standard” was a universal metric for currency exchange and wealth. Today, that might as well be “the mobile data standard.” With the rise of smart phone technology, the world has seen a rapid increase of streaming video, audio, and raw data to screens across the globe. Additionally, the advent of the Internet of Things (IoT) has brought that same technological concept to wearable gadgets, appliances, cars, and even homes. Data has become a precious and essential commodity. As data providers, telecom companies find themselves pressed to do more with less. What’s the state of data usage today, and how will it shape the future for telecoms providers across the world?
The State of Data Today
As mobile devices become more ubiquitous, data usage will only rise. According to a 2016 study by Cisco, global mobile data grew by 63% in the last year. More specifically, traffic increased to 7.2 exabytes per month at the close of 2016 (for reference, an Exabyte is equivalent to one billion gigabytes). To give some perspective, that means traffic has grown by 18 times since 2011, when mobile networks transmitted roughly 400 petabytes per month.
Where’s all this data going? This growth in data usage, it turns out, is not singular to any one area of the world. Cisco’s calculations uncovered that in terms of growth, only North America charted less than a 50% increase (44%). The leading region of mobile data traffic growth was the Middle East and Africa, viewed as a single region in the study, and one where the traffic grew by a whopping 96%.
In the last year, roughly 429 million mobile devices and connections were added to the already saturated Internet. Most were smartphones: experts report that US consumers collectively look at or interact with their devices more than 9 billion times a day. Other devices like wearable smart watches and fitness bands are still somewhat niche products, but purchases of these items doubled from 2014 to 2015, and then tripled in 2016. At this time, smart watches represent somewhere in the neighborhood of 12% penetration in the mobile consumer market. As devices like these get more innovative and refined to consumer tastes, telecoms providers need to be ready for them to connect.
Challenges to Providers
With usage of smart devices up across almost every demographic, the opportunity for growth among telecom companies is huge. The advance of network technology and connection speed has brought to life the continuing promise of delivering content to any screen, anywhere. Additionally, the rise in popularity of the Internet of Things is not just due to its new status as one of the buzzwords of 2017; consumers in both the private and public sector are clamoring for smart technology solutions that truly make their lives easier. For consumers, this means growth in wearables, smart cars, and connected homes, while government entities will be looking toward smart cities and smart business, with interconnectivity for things like logistics and fleet management.
However, with all of these new opportunities, there will inevitably be hurdles to overcome. While there are a multitude of possible struggles in the development of telecom’s future, much it is focused squarely on the transition from fourth generation (4G) to fifth generation (5G) mobile networks. In order to make that update, carriers will ultimately have to upgrade their infrastructures, which mean a need for capital. A systemic change like this would likely cost a single telecom company billions of dollars, so companies will need to develop a strategy that allows them to look to the future and find good partners, while also allocating funds toward emerging sectors like IoT and self-driving cars.
One possible route may be to further or more efficiently monetize video traffic, which Cisco reports accounted for 60% of total mobile traffic in 2016. Another tactic would be for the telecoms company to streamline its own operations. This would certainly include customer service and sales operations, which have already shown improvements in efficiency for companies who have farmed that out to social media channels instead of large call centers. However, this would also apply to issues such as regression testing and quality assurance within their development team.
Scaling and Testing
As growth continues and telecom companies work to remain relevant – especially for those with a large amount of capital at hand – it may seem tempting to jump from point A to B (or Z, in some cases). However, the most important task of any business in this field is to provide high quality, reliable, and affordable data and voice services to their customers. And in an industry where updates are the name of the game, a lack of effective testing techniques may lead to a drop off in quality, in reliability, and ultimately in customers.
Without effective testing for each software release, telecom companies have no way to ensure that the parts are working correctly. The desire for increased efficiency in network equipment will likely lead to a shift away from hardware-based functions to a software-focused network, with utilization of software defined networking and network function visualization. The implementation of these new formats of operational systems will require extensive quality assurance testing of each new factor. Additionally, as these new components are integrated into networking systems, compatibility will need to be measured with constant regression testing. These testing processes (regression specifically) can be automated, although most companies will need to find the right testing partners in order to achieve that goal.
As we become more heavily reliant on smart devices, the concept of data and data allocation will become an increasingly hot button issue in future years. There seems to be no end in sight for these everyday tools, so telecom companies will need to stay up to date on all emerging trends, while also keeping an eye out for future growth. In doing so, they’ll need to ensure they develop at maintainable levels to keep everyone connected that they’ve promised to serve.