Internet of Things Technology Adoption Will Drive The Global Telecoms Market
24 Jan, 2020
Internet of Things (IoT) technology adoption by manufacturing and transportation services companies will drive the global telecoms market in the forecast period. IoT is a network of physical objects such as devices, vehicles, buildings and other items which are embedded with electronics, software, sensors and network connectivity, which enable these objects to collect and exchange data. Microsoft and Rolls-Royce have announced a partnership centering on future Rolls-Royce intelligent engines, which will integrate Microsoft Suite into its service solutions to expand its digital capabilities. Smart Grid encompasses inter related technologies entering public use to manage electricity consumption. IoT technology adoption is expected to expand the demand for telecoms services.
The global telecoms market is expected to grow from around $2,861 billion in 2019 to nearly $3,453 billion in 2022 at a compound annual growth rate (CAGR) of 6.4%. The telecoms market consists of sales of telecoms goods and services by entities (organizations, sole traders and partnerships) that apply communication hardware equipment for the transmission of voice, data, text and video. This market includes segments such as wired telecommunications carriers, wireless telecommunications carriers and communications hardware manufacturers. The telecoms market also includes manufacturers’ sales of goods such as GPS equipment, cellular telephones and switching equipment.
A survey in the UK regarding emerging technologies was conducted in 2018 by Telecom.com Intelligence, among telecoms professionals. According to the survey, 20% of respondents believe that the Internet of things (IoT) is the leading emerging technology. At the same time, nearly the same percentage of respondents (20%) agree that Artificial Intelligence (AI) is the second most important emerging technology. However, according to the same survey, more than 60% of survey respondents believe that emerging technologies are unfavorable for the long-term success of the telecoms industry.
About 10% of respondents feel that the potential of emerging technologies and services are negative for telecoms services.
The biggest forthcoming change in the telecoms industry is the emergence of fifth-generation (5G) mobile networks. 5G technology is expected to offer faster speeds and reliable connections than the 4G technology. The 5G network is under development and is expected to be launched across the world in 2020. The 5G network is expected to support a massive IoT ecosystem. Low latency and high bandwidths are other important features that will be driven by 5G.
Another important driver of the global telecommunications market will be the increasing development of smart cities. Governments around the world are increasingly investing in developing smart cities. The European Union is actively promoting smart city initiatives, with funds for research and sustainability targets for member states. The concept of smart cities is also gaining popularity in developing nations. In China and India alone, almost 300 smart city pilots are currently planned. These projects will require state-of-the-art telecoms networks. This will act as a major driver for the growth of the telecoms market going forward.