For years telecoms have enjoyed significant revenue, healthy profits and lively competition. People wanted to stay connected and whether it was for business or pleasure, such connections weren’t just a desire, but a necessity. Now, as cloud computing is growing into a dominant technology driving the way we live and play, telecoms are forced to change the way they run their networks and the master agent has to play along.
Authors Eric Auchard and Leila Abboud describe the collision course in a recent Reuters (News - Alert) article, suggesting the shift is still in its early stages; once powerful computing systems are being replaced by cheaper boxes running powerful software. The promise is to make networks more efficient and reliable. The gear makers who once enjoyed healthy profits are having to search for new sources of revenue and serve more as consultants or search for opportunities beyond the telecom industry.
As companies simplify the way they manage their networks, the lines between the telecom and computer industries are becoming blurred, creating the perfect environment for acquisitions. Equipment makers and information technology groups are pitted against one another with the former believing it is better positioned to disrupt markets for the latter. The pace is expected to accelerate over the next five years with trillions of dollars in contracts at stake in the quest for 5G.
Those able to secure the contracts will have high expectations to meet as the mushrooming demand for video and billions of new devices will stretch networks to their ultimate limits, more so than we’ve seen in the past. Not only are smartphones changing the way we connect and compute, home appliances, cars and industrial sensors will also need access to the network to communicate, provide hotspots and more. This can create significant opportunities for the master agent correctly aligned with the right players.
The stage has already been set with the announcement this week that HP will get to overhaul Telefonica’s entire network in an attempt to make it cheaper and more flexible. At the same time, Cisco (News - Alert) Systems is now building out computer networks, securing smaller deals with European carriers to deliver cloud-based Internet services and small cell antennas in an effort to improve data and mobile phone coverage in areas with heavy call volumes.
The master agent has a significant stake in this game, as they have to be on the forefront of available technologies and deliver solutions according to the demands of the industry and still enable profitable operations for clients. Staying abreast of recent trends is critical and as computing and telecom continue to evolve into each other’s territories, the opportunities could make or break the other. Those coming out on the winning side will be those who are best suited to keep pace with a rapidly changing environment.
Edited by Rory J. Thompson