Heiko Henkes, Jeff Cosby and Jon Harrod also contributed to this article.
We are in an era brimming with technological potential, and the most amazing innovations are yet to come. What will happen in the global Telecom, Network and Media and Entertainment industries in 2024? And how do enterprises in these industries need to prepare?
Let’s explore the top seven tech trends and their business implications.
- Enterprises will demand efficient network capacity for better return on investment. Global mobile data traffic is expected to grow by 54% annually from 2020 to 2030, according to ITU forecasts. Growth in 5G private networks is continuing to fuel small-cell densification across Manufacturing, Mining, Healthcare, Shipping, along with the public sector and many other industries. Operators are focusing on standalone 5G deployments for security, compliance, high throughput and ROI. With integrated SIMs or eSIMs, differentiated pricing tiers for roaming, retail, interconnect and wholesale businesses will also allow providers to offer options in network slicing on 5G SA networks. With open APIs and further collaboration, Public Sector enterprises, Manufacturers, Healthcare organizations and Retail enterprises will drive deep efficiencies to bring down costs by more than 20% via tried-and-tested use cases. Overall, these private 5G sites and network slicing approaches will add broadband push-to-talk, collaboration and messaging with other services such as simultaneous voice translation. Rich communication suite (RCS) -interoperable messaging services between Android and iOS ecosystems will further drive the platform-centric interoperability. What are the business implications? The majority of B2B2X relationships (in which telcos contract services with businesses that own the final relationship with customers) or B2B applications in private networks will see a continued dependence on video-centric solutions in 2024. This will be especially true across factory vision inspection, environmental monitoring and surveillance, intelligent transport solutions, remote collaboration, live immersive broadcasting and personalized advertisements via short form videos and video on demand. Further, in 2024, in-building 5G solutions will remain an apparent extension for operators and neutral host providers to improve their ROI in dense urban environments via increased public-private participation. The ROI will be supported via location-based ads and e-commerce-backed streaming on portable gaming and lightweight AR-enabled devices for enhanced engagement. OTTs and operators will continue to bundle services beyond video-only content to include telephony, conferencing, voice and chat. ISG predicts these trends will propel acquisitions in the midmarket within the TME industry. 5G, gaming, eSports, ad-supported streaming, TV commercials, digital media, retail media networks and international productions will remain hot in 2024.
- Companies will continue to simplify their networks for better customer experience (CX). As the adoption of SD-WAN and SASE continues to fuel global expansion for enterprises, automation, AI and cost optimization will drive network simplification for better CX. Demand for end-to-end security for remote access encourages providers to support SASE, SD-WAN, wireless WAN and platform-based managed network services with enhanced broadband offerings in a hybrid cloud environment. With developments in virtual/cloud network functions, this year will bring about the perfect fusion of security, network as a service (NaaS), decentralized edge networking and AI. What are the business implications? The technological evolution of the software-defined layer paves the way for scalable, adaptable and efficient business models. Cloud operations, platform ecosystems and applications, together with cloud-native deployments, are expected to grow in the context of edge-based network applications, which are tuned toward resiliency, security, self-healing via automation, latency and reliability. Therefore, the triad of platform, ecosystem and edge will not only ease the bottlenecks to provide a guaranteed delivery and QoS to businesses but also form the mainstream components of network transformation projects in 2024.
- Fresh open RAN approaches will help simplify networks, avoid new forms of vendor lock-ins, streamline processes, reduce risks and enhance security. In a multi-cloud, multi-vendor and multi-network environment, radio access networks (RAN) are entering new territory, dubbed “Open RAN 2.0,” with the adoption of select-vendor-focused open RAN approaches to align better with open network frameworks. With this approach, automation in radio interface controllers could bring better quality of service (QoS) and spectrum optimization. Further, with the increasing adoption of open APIs, open networks are showing promise in providing low-cost rural connectivity options that are technologically advanced in terms of satellite access, broadband and Wi-Fi. This could be a critical year with open RAN, open access points and open-source networks gaining popularity as more than 80% of Tier 1 operators deploy open constructs across wireline and wireless infrastructure. What are the business implications? Amid an evolving regulatory environment, higher competition and greater degrees of innovation, there will remain increased scrutiny over vendor flexibility and cost benefits. Open Ethernet/optical networking and internetworking consortiums are expected to bolster network disaggregation initiatives supporting higher throughput and better efficiency. However, in a broader ecosystem with nuanced security threats, operators need agile technological architecture and managed security services support to respond proactively. The Open RAN 2.0 acts as a catalyst for telecom operators to simplify, secure and hasten their open network journey. This will, in turn, support the NaaS movement highlighted in prediction #1.
- The need for superior CX will drive services focused on automation with end-to-end observability across the core and edge of the network. In a multi-cloud and multi-vendor environment, unified management systems that can be deployed across clouds, edge, networks and data centers will enhance technological agility, reliability and security. In 2024, we will see at least half of the top 1,000 global enterprises leveraging SD-WAN with a unified end-to-end single-pane-of-glass view to reduce costs by more than 10%. Customers are expecting improvements related to latency, jitter, throughput, path optimization, device CPU usage and threat detection. What are the business implications? The rise in adoption of autonomous observability tools and solutions for security, customer ops, network troubleshooting and performance will encourage the adoption of a unified data strategy. This kind of strategy will combine data-for-all initiatives with all-for-data initiatives, which democratizes data-led initiatives beyond data scientist teams. However, equating data to generative AI (GenAI) could be a big surprise for Telecom and Media enterprises that might require far broader governance and oversight, especially in Europe under a developing EU AI Act. Leveraging biased algorithms to increase the conversion rate in advertising could lead to fines. Handling customer inquiries and optimizing network operations is vastly different from handling personal data for monetary gains. In this case, investments in unified management platforms will not only reduce operational complexity and costs for CTO/CIO teams, but will also need to be balanced with privacy by design principles.
- The cost of cybercrime will continue to increase. In 2024, ISG expects more than 90% of large global enterprises to name network security as their number one network priority, compared to 75% at present. As threats rise in tandem with developments in AR/VR/MR technology, expanded reality (XR) engineering and XR-supported applications need to balance ease of use with the elements of security, sustainability and privacy. As a result, ISG expects to see an increasing number of blockchain use cases to improve attribution and compliance and to automate contracts. What are the business implications? With the rising adoption of GenAI, regulatory and compliance requirements in most geographies need to be balanced with ROI for use cases. As the world’s two biggest democracies India and the U.S. go into elections in 2024, trust, regulatory and safety teams will be under scrutiny. The emerging use of Web3 media platforms and applications will combine a multitude of applications for users to combat misinformation and threats emanating from a Web2 world. We expect to see some new state and country regulations around data security, compliance and privacy.
- Private satellite communications players will flood the non-terrestrial communications market. We are likely to see technical advances in high throughput low-earth-orbit (LEO) constellations, inter-satellite connectivity for low latency as well as payload. We will also see increased adoption of AI and ML for maintenance and remote-sensing for enhanced security. The price of bundled satellite connectivity offerings will continue to be high. In this scenario, satellite-to-phone connectivity will need amplifiers and antenna equipment to be increasingly software-defined, compact and power-adaptable. We expect some consumer-centric innovations in 2024. What are the business implications? Leaving aside regulatory and financial hurdles, collaborations by way of joint ventures and IP acquisitions ― between telecom operators, satellite operators, space alliances, solution integrators, launch companies and semiconductor players ― are expected to solve challenges in the context of reliable power, cost and pricing, security and quantum cryptography, and navigation and inter-constellation collaboration. The cost and profitability of downstream internet connectivity will propel “satellite launch” businesses to decouple from (or reduce their dependence on) the main internet provider businesses. Deep coordination and collaboration among QUAD (the U.S., India, Japan and Australia), NATO, Five Eyes Alliance (Australia, Canada, New Zealand, the U.K. and the US), ITU, the U.N. and national space agencies could spark innovation in earth observation, situational awareness, semiconductors (with an overall push of $65 billion across QUAD group alone), space policy and exploration as well as defense markets. The year could also see a convergence of space policies with terrestrial regulations to attune to global geopolitics.
- Sustainability will be a key theme for innovation and infrastructure development in 2024. Even though 6G remains a distant technology, PoCs for satellite-to-terrestrial networks will become increasingly commonplace with high altitude platform systems (HAPS), propelled by the increasing use of solar energy or green hydrogen to push 5G connectivity. This will be a key year in which sustainability ― sustainable development goals for innovation and infrastructure, reduced inequality, partnerships and quality education ― will be a key theme. As solar energy or green hydrogen spurs PoCs supporting HAPS, sub 6GHz will be the central pillar for enhancing connectivity in remote areas. Further, more than half of Tier 1 operators and top Media organizations will adopt sustainable practices to reduce scope-three emissions by collaborating within their supply chains. What are the business implications? In conjunction with AI, the increasing adoption of green practices, such as using renewable resources for data centers and distributed ledger technology for green bonds, will lead to meaningful progress in terms of sustainability in 2024. Demand for skills in emerging and deep technologies, including quantum computing and photonics, continues to outpace supply as the innovation trajectory takes a non-linear and sustainable approach. Collaboration between computing and telecom ecosystems is set to increase, with a rise in platform adoption as well as demand for government-backed innovation driven by regulatory, social and economic enablement.
What Does It Mean for Service Providers in 2024?
According to ISG Star of Excellence™ 2023, the satisfaction score for the Telecom, Media and Network industry remained high for analytics, ADM and contact center functions. The results reflect the industry's commitment to delivering superior services, embracing technological advances and maintaining a customer-centric approach. In 2023, enterprises also showed a high degree of satisfaction in the categories of “execution and service delivery” as well as “business continuity.” Top Telecom and Media enterprises (TME) will continue to prioritize innovation and resilience in service delivery ― for outsourcing business and IT operations ― over cost considerations. That said, some in-house functions will depend on captive center delivery, which will balance risk, cost and a design-led strategy. As enterprises seek partnerships to handle decentralized and dynamic operations, the year will see a paradigm shift in outsourcing among Telecom enterprises in these two key areas. Satisfaction rates in the categories of “people and culture” and “governance and compliance” in 2023 were lower for Telecom and Network enterprises than they were in 2021 and 2022. We expect providers will need to meet demand for higher levels of innovation, collaboration and governance in IT projects in 2024.
With collaboration among many industries and impending consolidation within the Telecom and Media industry, we expect systems integration efforts to rise in 2024. And, with the rise in demand for managed services, the key focus area will remain on client satisfaction with a safe adoption of new technologies that provide clear return on investment.
AI, multicloud/hybrid cloud, engineering and related ADM projects remain center stage. Service providers will likely use robust technology ecosystems and edge-related AI solutions to bolster their positions in the industry. In 2024, AI spending is anticipated to focus on projects related to elevating CX, enabling nimble software engineering, fostering smarter product R&D, as well as ensuring smooth marketing and sales thus displacing some of the spending from other technology areas. We also expect productivity gains from GenAI to reinforce spending on cybersecurity projects – more so in the public sector or region-specific programs. Tier 1 IT service providers will also likely embed sustainable IT practices to help TME enterprises reduce their scope-three emissions. The adoption of code reviews and tools and frameworks designed to optimize resource use is also likely to find continued appreciation among enterprises in 2024 and the years to follow.
Service providers will seek differentiation in 2024 along the following lines: consolidation of operations, M&A, strong collaboration with partners for interoperability and revenue assurance, decentralization for operations with hyperpersonalization for customers, and automation for achieving cost-efficiencies supported by rapid innovations. Collaborative governance and a risk-sharing culture are expected to drive ecosystem synergies further.
Given the intense competition, we expect CX scores to dip marginally in 2024 since several multi-year contracts are set to expire and renewals will likely be more competitive. Enterprise expectations of providers in the context of governance and compliance will continue to rise for ensuring network security, navigating regulatory complexities, protecting consumers, ensuring data privacy and managing risks effectively.
ISG helps enterprises in the Telecom, Network and Media industries navigate a fast-changing technology market. Contact us to find out more.