2023 appears to be the breakthrough year for telcos and tech companies, while also introducing a variety of obstacles to overcome. The gradual evolution of business messaging and the maturity of technologies such as 5G herald new business opportunities and challenges mobile operators should be aware of in order to successfully secure and diversify their revenues. In this article, we look closely at the trends that we believe will affect our industry this year.
Further telco firewall evolution
While mobile operators’ profit margins have always been very tight, the loss of roaming revenues during the pandemic has further deepened the problem. As a result, identifying as many revenue leakages as possible has become paramount to ensuring the sustainability of their business.
While network firewalls are operators’ trusty tools that help prevent revenue leakages, they must be adapted to emerging trends within the messaging market, such as the gradual departure of legacy 2G and 3G networks and rollouts of 5G connectivity, as this will decrease the volumes of messages passing through networks.
With the increasing adoption of data-rich services (including operator-led CPaaS solutions), multi-media firewalls that can detect fraudulent traffic across multiple channels will become an absolute necessity. Similarly to messaging, the growing volumes of IP voice traffic will cause an increased number of instances of voice-based fraud. Since fraudulent players will continue to attack operator-led channels, looking for new ways to deliver traffic illegitimately, operators will have to deploy intelligent firewalls with machine learning capabilities if they want to adapt to the constantly evolving tactics of fraudulent players.
5G ecosystem maturity calls for a new level of partnerships
While for the last few years, 5G has been perceived either as a gimmick or as a promising yet underrepresented technology, the recent developments indicate that 2023 might be the year to change the status quo on a large scale. As of June 2022, 208 mobile operators in 79 markets worldwide had launched commercial 5G services. This includes 34 European markets, 14 markets across Asia Pacific, and all major U.S. carriers, with the total 5G subscriber count expected to reach 2 billion by the end of 2023.
However, the ecosystem remains the last barrier to realising 5G’s potential. While deploying private 5G networks is the key to developing 5G services, the high cost and complexity of building and managing such networks is a challenge that can be solved via cross-industry and cross-functional partnerships.
Juniper Research and Nokia quote establishing satellite 5G networks as one of the key examples of such collaborations. The launch of low-orbit satellites will provide the potential for ubiquitous 5G coverage. And while operators might not be able to afford to develop satellite networks independently, large technology conglomerates, such as Starlink, Amazon, OneWeb and Telesat, will be able to back them up, creating an opportunity for both supplying connectivity in distant and rural areas, and further enhancing advanced solutions such as Internet of Things.
Operator-led edge computing
The development of 5G, including the satellite variety, will greatly affect the efficiency and adoption rates of edge computing, as these two technologies complement each other, resulting in decreased latency.
Juniper Research believe that industrial IoT (Internet of Things) will be the most prominent area of application for edge computing, as manufacturing and production industries will gain the most from the additional latency provided by edge computing. Operators can facilitate this by moving infrastructure for processing data from core network locations to base stations at the edge of their network.
With heavier computational actions like real-time analytics, AI or Machine Learning taking place closer to endpoints with very low latency, a variety of use scenarios like future autonomous vehicle networks will finally start taking shape (while AI and ML will also be vital for orchestrating the edge computing services).
As a result, operators will benefit from the reduced strain on their networks as edge computing can drastically reduce the amount of data sent to core networks and hence optimise the operational costs, while enterprises will receive an opportunity to increase the efficiency of their operations through lower latency, greater network speed and local storage of essential data.
The impact of high pricing models on SMS’ long-term viability
In recent years, unpredictable A2P SMS price increases initiated by the operators have become an issue for enterprise strategies and planning, dissuading the latter from using SMS and driving them to seek alternative solutions, like messaging apps or even grey route SMS vendors. And the operators’ first natural reaction is to raise prices even higher in an effort to protect their revenues.
On the surface level, enforcing regulator-controlled pricing appears to be the easiest way to solve the problem. However, authorities and regulators tend to be historically heavy-handed due to a lack of understanding of the messaging business. For instance, the introduction of such regulations in Colombia has crippled the adoption rate of the new technologies, while the A2P providers were restricted to low prices.
Since decreasing traffic only urges operators to increase prices further instead of keeping them at the same level or introducing tiered or scaled pricing models, they become trapped in a vicious circle of A2P SMS tariff increases and revenue losses. Raising awareness about this situation could bring the desired balance to the ecosystem and could be done in several ways, including an industry white paper laying out arguments supporting the idea of sustainable pricing models.
Another viable solution that might work hand-in-hand with raising awareness would be to diversify the MNO messaging portfolio by adopting a suite of messaging channels as a part of an operator-led CPaaS solution. While developing such a platform in-house or by engaging a third party takes tons of time, money and bandwidth, a CPaaS solution provider can make this process more efficient. This way, operators can capitalise on the expansive list of local and international enterprises directly connected to their network.