CIO Review APAC

The telecom services sector shows a positive stance in revenue growth and is turning the better in the business landscape by evolving and aligning with new technological developments.

Despite a challenging stock market, telecom stocks have shown better results in recent years. There is a positive stance towards the telecom service sector in terms of earnings growth and a turn for the better in the business environment. In the coming years, telcos are expected to keep evolving, aligning with new developments such as increasing demand for IDCs and cloud businesses, net neutrality issues, and investments in content businesses. With the steady growth of core 5G network business, telcos will display a solid growth in the coming years.

Business Environment Turning for the Better

Seamless and stable telecommunications networks are important factors for telecom companies. Moreover, the issue of net neutrality has drawn attention in the market after a few organisations reduced their maximum video quality. At the end of net neutrality, telcos’ network investment burden should be erased. The telecommunications industry's business conditions are steadily improving, encouraging telcos to make more aggressive investments in their content domains.

Demand for IDCs and Cloud to Expand Further

With demand for data centre services expected to grow further going forward, there are new business opportunities emerging for telecom players in the IDC domain. As it takes a significant amount of time to complete the construction of data centres, supply will fall short of demand. Domestic telcos draw on their longstanding experiences in telecom network operations for their IDC ventures. Cloud and IDC businesses will have significant synergies.

Foresee Solid Earnings Growth based on 5G Network Domains

With 5G predicted to be the main communications network, the 5G penetration rate will drastically exceed that in the coming years. Backed by rising 5G penetration rates and the normalisation of roaming sales, ARPU will rise steadily shortly. Subscription-based services promise to drive additional sales at telcos. After the intense 5G competition period, marketing has radically eased. The stable market conditions will sustain through the launch of 6G services, and as 5G coverage is widely available, telcos' capital expenditures will see new growth.

Telecommunication has completely transformed the way people communicate and navigate their personal and professional lives. With the ever-increasing importance of humans connecting and communicating, this industry is likely to witness growth. Furthermore, telcos should take the lead in designing and delivering the best solutions for ever-changing demands. 5G and IoT deployments will define the telecom sector’s progress in the coming years. New telecom opportunities bring concerns that need attention from innovative solutions such as ultra-low power solutions, blockchain, and edge computing. Moreover, with Industry 4.0, telecom players will lead this revolution with next-generation connectivity.