The telecommunications industry will be undergoing some new transitions this year, most notably due to the rollout of fifth generation (5G) technology. Global telecom revenue is forecasted to grow up to three percent through 2019.
Last year, several major deals took place, some in part due to the threat that digital streaming services and changes in the media industry pose to telecom giants. Comcast outbid Fox for a $39 billion acquisition of Sky, and AT&T picked up Time-Warner for $85.4 billion. Other deals of note were the merger of T-Mobile and Sprint, and AT&T’s acquisition of Otter Media. For 2019, the telecom sector is forecast to see plenty of M&A activity due to enticing opportunities for investors due to new technologies.
The Era of 5G
The advent of 5G technology is going to enable faster Internet speeds and create a wealth of possibilities. With 3G technology came new opportunities through the enabled use of GPS. Current 4G technology is able to reach speeds of up to 100 mbps and allows us to consume data at higher rates. The new 5G technology is expected to reach speeds of up to 10,000 mbps. This impressive difference in speed is why it is such a game changer for the telecom industry, and a slew of other industries, such as media, manufacturing, healthcare, transportation, retail, and utilities, just to name a few.
It is anticipated that the first 5G-compatible smartphones to be released sometime this year, with second-generation chipsets coming later in the year. The first commercial networks to be launched are expected to be in China, South Korea, Japan, and the United States. American-based Verizon is already offering its 5G Home broadband service in select regions.
The Evolution of Blockchain
Blockchain has typically been associated with cryptocurrency because that is what it was originally designed to support. That perception is rapidly changing as companies discover different ways that it can be beneficial.
In the simplest of terms, blockchain is a virtual ledger that records data securely and transparently. This is because all network participants must agree on transactions before they can be recorded, and data cannot be altered or deleted, reducing the risk of fraud. Transactions are encrypted and linked to any previous transactions. This method eliminates paper-heavy record-keeping systems and third-party intermediaries, and allows for the faster, easier updating of transactions. Additionally, the transactions recorded in the “blocks” are stored in millions of computers that are part of the “chain.” This decentralization means that data cannot be lost, and it can always be recovered.
Blockchain has the potential to transform the telecom industry in various capacities. This includes prevention of fraud, reduction in costs, management of user identities, enhanced communications, and improved mobile payment.
The Power of Artificial Intelligence (AI)
AI is making its mark on an array of industries, but it is particularly transformative in telecom. By using AI to analyze enormous amounts of data, communications service providers are improving operations and customer experiences.
- Self-optimizing networks (SONs) allow network quality to be optimized based on traffic reporting by region and time zone.
- Virtual assistants are being used to reduce business expenses by automating services and one-on-one conversations.
- Predictive maintenance is enabling telecoms to use data to proactively fix problems with equipment before they arise.
- Cognitive technologies such as robotic process automation are saving companies money by streamlining tedious processes and freeing up staff to focus on higher value tasks.
Time to Make a Move?
Contact us if you are interested pursuing a growth strategy or an exit plan. No matter what sector you work or invest in, Benchmark International can help you take your aspirations to the next level.
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Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 12 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.