Predictions 2014: Service provider trends

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There is no such thing as “going solo” in business especially in the ever frenetic and fast-paced industry of service providers and telecommunications.

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In the past few years, service providers have felt vulnerable, standing alone against new competitors coming to eat their lunch. As a result, many operators are searching for ways to realize the value of mergers and acquisitions to rationalize their business, consolidate their networks, integrate their offerings and better prepare for the competition.

Even the expected trends in 2014 are all about “two is better than one.”

According to Michael Harris, Market Insight and Strategy Director at Amdocs— the leading provider of customer experience systems and services – the wave of consolidation will continue into 2014 across regions.

“Service providers will continue to merge to rationalize their businesses and to ensure growth and efficiency,” Harris wrote.

Among the 2014 industry trends that the industry should look out for is consolidation. Pressure from market saturation, increased competition, the search for new growth engines and economic conditions are driving service providers to rationalize their business and to consolidate. In the first half of 2013, mergers and acquisition (M&A) deals worth around +60 billion were announced in Europe’s telecoms market, almost double the volume in the same period last year, and further growth of M&A in 2014.

Another trend to watch out for is “Big Data.” Defined as data which “exceed(s) the capacity or capability of current or conventional methods and systems,” big data will play a role in 2014 with service providers shifting towards realizing its value and using it to help with internal and external data monetization. This will also allow for a more seamless customer experience where consumers can expect a more personalized service such as sending proactive alerts to customers when they’re reaching data limits or offering deals by partnering with their favorite retailer.

Networks will still be a huge player in 2014. Service providers will make the shift from LTE roll outs to monetizing and optimizing their major network investments. They will look to combine efficient deployment with innovative pricing strategies and a rich portfolio of services. This was something seen in 2013 with Vodafone offering access to Sky Sports TV or Spotify Premium. Service providers will focus more on deployments of small cells, WiFi offload and leveraging SON (self-optimizing network) technologies to optimizing their network investments.

Finally, 5G is the new 4G! 4G/LTE was successfully rolled out in many countries in 2013 and will continue its rapid growth in 2014. Service providers are focusing on optimization and monetization of their new networks as the development of a standard for 5G is heating up—trials have already started.

Other growth areas and trends include omni-channel experience, growth of wearable devices, mobile financial services, SMB and enterprise, next generation TV experience and virtualization.

Harris concluded that there will be great opportunities in 2014 but there will also be plenty of mergers and acquisitions in the new year as the industry continues to evolve and service providers consolidate to embrace new challenges. Be ready for an exciting year ahead.

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