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Telecoms predictions for 2016: Monetisation, engagement and IoT

2015 has been a year of change and consolidation, particularly for Mobile Network Operators (MNOs) that have been challenged by new players in the ecosystem, including device manufacturers and Over-the-Top (OTT) players.

As we near the end of 2015, now is the time to take stock and look ahead... What might 2016 hold for players in the telecoms industry?

Drawing from over 13 years’ experience, and the various issues and innovations witnessed in 2015, new telecom-web convergence initiatives will likely continue coming to the fore as mobile operators try to achieve stability. 2016 will be a year where MNOs try to reassess what assets they need to protect and what they need to open up for revenue generation, alongside the rise of the monetisation of user profile data and A2P messaging.

E-SIM adoption will gain traction, with major push from device manufacturers; monetising user profile data will also become increasingly popular despite growing debate over reverse-engineering capabilities; and IoT will continue to falter due to security risks to both consumers and businesses.

Another trend we’ll see, for the second year in a row, is a move to OTT. Telecommunication and internet services will continue to converge, as enterprises look to this service for low-cost yet high-quality engagement with customers and employees. Overall, the global telecoms industry will continue to rapidly change with MNOs having to either adapt quickly to the new developments or risk becoming less relevant year after year.

Key trends and predictions for 2016, at a glance:

  • Monetising user profile data will gain traction, despite the growing debate over reverse-engineering capabilities
    • User profiling will become even more controversial as consumers weigh-in on privacy-impacting practices, armed with reverse-engineering findings from tech-savvy advocates
    • Brands’ huge appetite for big data will make MNOs get serious about monetising their data assets (repositories and live data)
    • MNOs’ data revenue will increase as they offer up subscriber data to other businesses
  • OTTs strike again: Enterprises will move to OTT for cheaper, richer engagement with customers and employees
    • As digitisation of all communications gets more realistic, enterprises will integrate OTTs to engage their workforce and customers
    • OTTs will push business offerings (workforce communication, consumer engagement, etc.) as they get into monetisation mode
    • Brands will welcome OTT hubs, further eroding the influence and revenue of MNOs
    • MNOs will experience unprecedented growth in non-monetised A2P traffic, especially the ones without sufficient security measures for safe monetisation
  • Mobile operators will accept e-SIM as inevitable, but will add software locks to limit switching between networks
    • Seeing the cost-efficiency of not having to make multiple different types of device for different wireless technologies and mobile operators, Apple (and other major device manufacturers) will push operators to adopt e-SIMs
    • The talk of standardised e-SIM will get into higher gear, with GSMA getting close to delivering the technical architecture by year’s end
    • Mobile operators will see e-SIM as inevitable, and explore ways to build in software locks to force the bond between the device and the connectivity service, making it harder for end-customers to switch between networks — or at the very least to limit their options
  • IoT vulnerabilities will raise business risks, stalling progress under the pressure of headline-grabbing security breaches
    • There will be major security breaches that will expose the fundamental weakness of existing IoT standards
    • Business risks associated with IoT vulnerabilities will dampen the hype around the recent promises of connected living
    • Existing standards will be scrutinised and proven ineffective to provide the sufficient level of IoT security
    • MNOs will make no meaningful gains in achieving connection efficiency necessary for the IoT economy

There’s no doubt that things are heating up in the telecoms industry and MNOs are having to scramble to catch up and evolve quickly enough.

As operators learn and adapt, we will see more trials of different business models and monetisation take place in areas where competition is fast-increasing. 2016 will continue to further the growth of the mobile market. We are in for an interesting and exciting year.

Thorsten Trapp, co-founder and CTO of tyntec

Image source: Shutterstock/Bakhtiar Zein