As we reach the midpoint of 2024, it’s time to revisit the predictions made by the Cerillion team in January about the telecom industry’s top trends. With the year half over, we examine how these predictions have held up, spanning topics from AI advancements to satellite communications and beyond.
The year began on a somber note, with a sense of “quiet desperation” hanging over MWC as the telecom industry continued to play a secondary role to big tech and AI. Now, six months in, there are some bright spots emerging despite the initial gloom.
Artificial Intelligence
The launch of GPT-4o has been the most significant AI development, boasting sophisticated speech and multimodal capabilities. However, controversy ensued when Scarlett Johansson sued OpenAI for using a sound-alike of her voice without permission, echoing her role as an AI in the film “Her.” This incident highlighted ongoing criticisms of generative AI using unattributed work. Concerns over AI’s impact on humanity persist, with experts calling for safety frameworks and stricter regulations. Moreover, the energy consumption of AI data centers is rapidly increasing, posing further challenges. Nvidia has emerged as a major beneficiary of the AI boom, but significant hurdles remain before AI can fully integrate into telecom operations.
5G Standalone
Despite early hopes for 5G Advanced to finally deliver on its promise, widespread adoption remains elusive. VMO2 became the second major UK operator to activate its 5G SA network, while Telefónica shifted its 5G Standalone network to AWS in Germany. Smartphone sales have rebounded slightly, yet the gap in 5G-compatible devices continues to hinder full utilization of 5G services.
5G Private Networks
Private networks have been a driving force for 5G in 2024. Partnerships have enabled these rollouts, such as T-Mobile’s private 5G network at the PGA Championship and Vodafone Business’s collaboration with Ericsson in Spain. Malaysia also announced plans for numerous private 5G networks across various sectors.
Simplification
Telcos are prioritizing simplification to stay competitive, often resulting in job cuts and divestments. Vodafone sold its Spanish and Italian units, while Telstra announced workforce reductions to improve productivity. Despite these measures, the impact of AI and automation on job losses remains minimal compared to economic uncertainties.
Security
Major ransomware attacks have plagued 2024, affecting organizations like the British Library, Christie’s, and Ticketmaster. The telecom industry has not been spared, with Australian ISP Tangerine suffering a data breach. The UK implemented the Product Security and Telecommunications Infrastructure (PSTI) Act 2022 to enhance cybersecurity for consumer products, but legislation still lags behind emerging threats.
Satellite Communications
The satcom market is expanding rapidly. AT&T and Verizon partnered with AST SpaceMobile for space-based broadband, while Spanish firm Sateliot launched 5G-standard LEO satellites for IoT. Qatar Airways began offering in-flight connectivity from Starlink. However, increasing solar activity poses a risk to both satellite and ground-based communications infrastructure.
Aggregation and Acquisition in the Altnet Market
Altnets continue to drive broadband growth in the UK, with nexfibre reaching one million premises and multiple acquisitions occurring in the market. CityFibre and Netomnia’s mergers exemplify the ongoing consolidation, yet new altnets continue to emerge, contributing to a saturated market.
Streaming Spend Slows
Consumer spending on streaming content is declining as predicted. While revenue has increased due to price hikes and ad-supported tiers, the cost of multiple streaming services now rivals traditional cable bundles. To attract customers, providers are bundling services, such as Comcast’s Xfinity StreamSaver and Disney and Warner Bros. Discovery’s combined offerings.
In summary, the telecom industry’s landscape is evolving with notable advancements and persistent challenges. As we continue through 2024, it will be interesting to see how these trends further develop and shape the sector.
Cerillion plc (LON:CER) is a leading provider of billing, charging and customer management systems with more than 20 years’ experience delivering its solutions across a broad range of industries including the telecommunications, finance, utilities and transportation sectors.
