10 Telecom Predictions for 20122:00 PM EST Wed. Dec. 28, 2011
With hefty buzz around cloud and managed services spurring new trends and consolidation a-plenty, 2011 was an action-packed year in the telco space. From mergers and executive shakeups, to new trends in mobility, many of the industry inclinations that started in 2011 will pick up speed this year. Now, CRN casts its eye on the coming year to make 10 telco predictions for 2012.
Now that AT&T’s $39 billion takeover bid has bit the dust, T-Mobile – which has been rapidly losing customers – will be left to face the volatile mobile marketplace on its own.
The breakup fee owed T-Mobile by AT&T - $3 billion cash, plus roaming and spectrum rights – is a decent start for the nation’s fourth largest carrier. It will expand T-Mobile’s network coverage by 50 million people and allow the carrier to access new markets.
But T-Mobile is still stuck in the middle – struggling to compete with Verizon’s LTE roll-out and getting squeezed by smaller, regional carriers that offer pre-paid calling and data plans.
In 2012, look for T-Mobile to forge a strategic partnership to gain the additional spectrum it will need to move to LTE. Dish Network, which bought its own chunk of spectrum and wants to play in the wireless market, could be the first taker for a mutually beneficially spectrum sharing deal with T-Mobile, Bloomberg reported .
2011 was the year of the telecom megamerger, and it radically reshaped the landscape for telcos and cablecos. From CenturyLink’s blockbuster $22 billion acquisition of Qwest, to Windstream snagging PAETEC -- which had previously gone on a buying spree of its own, a flurry of M&A activity in recent months had jaws wagging.
Many of the most talked about megamergers we saw this year were between complementary carriers looking to build out network footprints for a wider reach on a national or global scale. But the space has become more tightly consolidated, and there are few carriers left on the scene that could conceivably be absorbed.
In 2012, don’t expect to see the megamerger feeding frenzy that we saw earlier this year. Instead, look for smaller, more strategic (or surprising) buy-outs that will ratchet up carriers’ ability to compete in the sizzling hot cloud and managed services space.
How much regulation is too much? Debates about fixed and mobile broadband regulation got heated in 2011, and the dispute over Net Neutrality has some activists forecasting a doomsday scenario in which the Internet as we know it will end in 2012.
Net Neutrality in its simplest form means that ISPs can’t give preferential treatment to or control (by speeding up or slowing down) certain content on the Internet. While some open-Internet advocates thought the FCC’s measures didn’t go far enough, critics on the opposite end of the spectrum decried the rules as overreaching.
The FCC’s net neutrality rules took effect on November 20th, and Verizon was quick to counter with an appeal, citing concern over the FCC’s use of broad authority to impose “sweeping” and “unneeded” regulations that would cause uncertainty in the communications industry. Verizon’s challenge will be decided before the D.C. circuit court of appeals in 2012 and, if successful, could cut the government out of the open Internet debate for good.
When everything from your car to your fridge can now be connected to a mobile network, you can be sure that in 2012 carriers will be looking to capitalize on this hot mobility trend where devices “talk” without human intervention.
And in machine-to-machine communications there are real opportunities for VARs within vertical markets, for example in healthcare, distribution, and manufacturing.
Ken Currie, director of business and marketing at Barcoding, Inc., a systems integrator in the supply chain and data capture space, has seen double digit growth from M2M over the past four years, and expects that growth to continue unabated into 2012 and beyond.
Helping to stoke enterprise and SMB’s enthusiasm for M2M, Currie said, is the fact that open source platforms have brought about better and more cost effective applications to market. And as more businesses look for more consolidated and simplified communications solutions, M2M will increasingly provide the answer.
We might have once taken our unlimited data for granted, but no more. Wireless and fixed networks are clogged with traffic, and carriers are prepared to regulate.
We’ve already seen Verizon and AT&T put an end to unlimited data plans and Sprint is one of the last hangers on to the unlimited plan – one of its major selling points in the market. Verizon has floated the idea of shared data plans, where families can share from a pooled bucket of data. It’s likely we’ll see this newly proposed plan come out in 2012.
But the data conundrum also applies to ISPs, some of which have already started applying usage caps to heavy data users. CenturyLink plans to impose a usage cap beginning in February. Users who exceed their monthly allotment will get a warning and an opportunity to buy a faster data plan with a higher GB limit. Repeated offenders won’t be subjected to fees, but risk having their service disconnected.
Data-hungry smartphone users are putting the pinch on wireless carriers, gobbling up spectrum with streaming music and movie downloads. Networks are already stretched to the limit, but with consumers adopting smartphones at an increasing clip, carriers are scrambling to find added spectrum to support their usage in 2012 and beyond.
And any help from lawmakers is no guarantee. The pending spectrum bill – which would free up airwaves used by broadcasters -- is currently in legislative limbo in D.C.
Yet while AT&T focused its energy on the doomed T-Mobile takeover, Verizon was busy brokering spectrum deals with cablecos. It recently paid Cox Communications – which torpedoed its own wireless division earlier this year – $315 million for 20 MHz of AWS spectrum. Verizon also struck a $3.6 billion spectrum deal with Comcast,Time Warner, and Bright House.
In 2012, it’s likely that wireless carriers will keep getting cozy with cablecos in their endless quest for spectrum.
There is no doubt that one of the biggest mobility trends of 2011 will continue into 2012. Forrester Research predicts more than 77 percent of organizations will support Google Android and iOS devices next year.
So far, the Bring Your Own Device (BYOD) trend has been both a blessing and a curse for businesses.
On the one hand, there are significant cost savings as well as worker satisfaction and productivity associated with BYOD. On the other hand, it’s been a nightmare for IT professionals looking to batten down the hatches against security breaches.
Still, it’s a boon for managed service providers, who stand to win by providing the cure to those security headaches. Research from IDC predicts the MDM market will reach $405.3 million in revenue by 2013.
The October release of the Apple iPhone 4S was, at first, a surprise and a letdown for fanboys expecting the iPhone 5.
But that didn’t stop eager consumers from lining up to get their hands on one. Aside from battery issues and a slight political controversy about the 4S’ talking personal assistant, Siri, reviews have been positive, and sales for the iPhone 4S have been record-breaking .
Still, attention quickly turned to the iPhone 5, with rumors swirling about its capabilities, appearance, and release date. Reports suggest it will be a bit wider and sport a bigger screen, but as for the exact dimensions, no one can say for sure. Whether the 5 will be LTE compatible depends on LTE antennae technology and its effect on the phone’s design, analysts have speculated.
And as for a release date, the rumor mill is spinning with some banking on March and others guessing fall. But most agree that we’ll see the real iPhone 5 in 2012.
The desktop computer is already taking a backseat to devices that give workers seamless access from anywhere, anytime, and that trend will continue into 2012 and beyond. In fact, Gartner predicts that by 2015, smartphones and tablets will outnumber PCs 4 to 1.
With the release of the iPad 3 predicted in early 2012, along with some other worthy rivals like the Kindle Fire and Microsofts anticipated OS platform Windows 8, tablets will certainly continue to shape how we do business.
Also in 2012, look for the mobile enterprise application market to explode, as more customers demand the user-friendly applications they enjoy on the consumer side to grow up for the business world.
In 2012, the lines between service provider, system integrator, managed service provider and telco agent will continue to blur as carriers anxious to get their piece of the cloud and managed services market court a non-traditional sales force.
But it’s a two way street. In 2012 more VARs will also partner with carriers, as they realize that, to stay relevant in a cloud-centric market, it’s important to own the last-mile connectivity.
"I think in time the two communities will be indistinguishable; they'll look the same," Craig Schlagbaum, vice president of indirect channel sales at Comcast Business Services told CRN. "That has to do with end users' needs and desires. They want someone building all those solutions for them, and in effect that's what a solution provider is."