The ongoing pandemic has sealed the global adoption of technology to sustain continued connectivity. Regarded as an essential service as newer technologies and 5G change the way people work, study and live, the telecom industry remains at the forefront of communications and connectivity – a force multiplier for other industries and an economic driver for countries. The following are some trends in the telecom sector as we enter 2022.
Shift to zero-touch 5G network
Countries will continue to place focus on 5G deployment, which will bring with it a surge in demand as well as complexity. A game-changer for operators is automating network and service orchestration to yield digital transformation of their networks and achieve optimized workflows. To this end, zero-touch operations deliver services through fully automated networks to facilitate scalability and operability, raising overall efficiency and reducing time to service and cost of operations.
Focus on fixed wireless access
Growth in 5G will fuel fixed wireless access (FWA) deployments and provide new revenue opportunities for operators. This trend will also be fuelled by consumers and businesses as digital transformation drives the need for broadband connectivity.
By the end of 2025, it is predicted that FWA connections will grow threefold to 160 million to account for one-fifth of global mobile network data traffic. In the Asia Pacific region, where a wide digital divide dominates, the ability for FWA to deliver internet access economically to underserved markets makes it an attractive solution. In many developing countries, governments are making increased broadband connectivity a national priority to promote digitalization efforts and economic recovery. This trend will likely generate more interest next year.
In addition, FWA is becoming one of the leading use cases for 5G to help operators monetize on 5G. As 5G FWA complies with the 3GPP, an equipment vendor ecosystem will grow to in turn create supporting equipment at scale, at lower costs for operators’ use. In Southeast Asia, Globe Telecom is the first operator in Southeast to launch a commercial 5G FWA service.
In Southeast Asia, the consolidation of operators has made headlines this year. In Malaysia, Axiata and Telenor have merged to become Celcom, the largest operator in the country based on market share. Thailand’s Dtac and True are also merging to form a $8.6 billion company, while Ooredoo and CK Hutchinson are also planning a $6 billion merger.
As scale is important for 5G deployment, merged companies enjoy greater economies of scale that reduces high 5G deployment and full-fibre broadband networks costs.
Chips shortage to persist
A global chip shortage that is likely to continue into 2023 has deep repercussions on the telecom industry. According to S&P Global, consumer electronic and network infrastructure sectors are more severely impacted, with smartphone productions and global smartphone shipment being lower as compared to pre-pandemic times. IDC reported that all regions experienced a decline in smartphone shipments in the third quarter, with the Asia Pacific (excluding Japan and China) declining by 11.6%.
However, in 2022, Deloitte predicts that the chip shortage will be less severe, and not all chips will be affected. Yet, this could derail operators’ plans in the region. In India, this will hamper operators’ effort to expand 4G network, which will impact network coverage capacity and quality. On a global scale, an ongoing chip crunch will hinder 5G deployments in advanced markets. A leader in 5G deployment based on the number of base stations, China’s 5G rollout has slowed down, with new 5G base stations reduced by 34% in the first half of the year, compared to the same period last year.
As operators gear up on 5G adoption and map out next-gen network infrastructure, a multi-cloud strategy is certainly regarded as one of the priorities. Shifting from their traditional models, operators are beginning to embrace edge offerings, in some cases partnering with hyperscalers to bring enterprises to the cloud. Working with hyperscalers provide operators the scalability to support and grow new revenue stream in a more sustainable way through service offerings as a managed service provider.
In the region, Singtel and Optus have partnered with AWS to deliver 5G solutions to enterprises on the edge. Indosat Ooredoo has also partnered with Google Cloud to target Indonesia’s small- and medium-sized business (SMB).
Open RAN growth
According to Dell’Oro Group, the global open RAN revenue is predicted to reach $15 billion by 2025, to account for more than 10% of the overall RAN market. This growth can be attributed to growing interest in the Asia Pacific (APAC) region. Despite the challenges in standardizing Open RAN to ensure seamless interoperability, more operators are beginning to adopt Open RAN to reap the benefits of flexible, intelligent, scalable, and cost-effective network in a multi-vendor environment.
Amid growth opportunities, the industry has to work through supply chain challenges that plague the wider landscape. In the region, we can expect countries like Malaysia to revert on their decision to pursue a single wholesale 5G network in early 2022, and India to navigate ongoing reforms in the telecom sector.