The telecoms sector in 2016: IT trends

Dave Millett, Equinox, takes us through the holy trinity of telecoms technology: broadband, smartphones, and VoIP.

As 2016 approaches three of the main telecoms technologies are becoming ever more closely linked. The rollout out of fibre broadband makes VoIP a realistic proposition for larger SME businesses. VoIP apps on mobile phones enable people to keep their business extension wherever they are and most people now use their mobiles rather than dongles for broadband access on the move.

So what is happening in each of these areas and are they competing or complementary? the world transfers over the internet doubles every 18 months. This isn’t just down to the growth of online TV channels but the fact that more and more businesses are moving to cloud based services.

Broadband in 2016

Unfortunately in many cases the internet speeds and capacities are not keeping up. With there being a total lack of fibre broadband in some business areas a change to cloud based services can result in companies having to upgrade to expensive data services. The rollout of superfast broadband seems to gain pace for residential customers only. Even the most optimistic figures from BT say that barely half of business premises have access to fibre broadband. Given that people running businesses from home boost that figure it is still a reality that there is virtually no fibre broadband in the business centres of most cities.

Growth of some companies is being restricted as the leap in cost from £30 a month for an unlimited fibre connection to £350 for a 20 Mb EFM or fibre ethernet circuit is too much for them. The end of the connection voucher, although much misused by some suppliers, did offer some subsidy. This slow rollout is one of the big arguments in favour of splitting Openreach away from BT to be an independent company.

There is also a danger that broadband in general is being seen as a commodity product with some small businesses seeing the sometimes give away prices of broadband on TV for residential services and using them for businesses. They are then caught out with slower repair times and poorer customer service when it goes wrong. Given that almost 75% of firms employing less than 250 people have some form of cloud services within their company it is essential that, for the sake of a few extra pounds a month, they get the right business grade broadband to support their organisation. As the cost of being without it will soon outweigh the savings.

Smartphone trends

With mobiles it is still astonishing that less than 10 years ago most people used either a Blackberry or Nokia as their mobile device. They were the two hottest telecoms companies of the day with combined valuations of US$200 billion.

Move forward to today. Blackberry has effectively admitted failure and just launched an Android phone whilst having barely 1% of the handset market, whilst Nokia was snapped up by Microsoft for US$7 billion and its name has disappeared from the mobile marketplace.

So, is anyone ready to predict what will happen in the next five years? Microsoft is focusing on the telecoms market with its acquisitions; not just Nokia but also Skype. With sales of Lync also expanding – they can make a challenge in both the fixed and mobile space. Samsung also play in that space but it is an area where Apple is weak. As devices become more integrated could that be a chink in their armour?

One challenge all devices face is battery life. Samsung has a strength here and as more energy sapping applications are developed this will become even more pressing – look at the low battery life of the iWatch. Potentially solar or motion based charging may help to extend use.

Another option is modular smartphones which Google is working on. It will allow users to create their phone, from clickable components, to their own personal specifications. Their Project Ara will mean if you are using energy consuming elements you can put in a larger battery or carry a spare that is clicked in. It also means less waste if a component breaks; just replace it – not the whole phone.

Whilst the iPhone 6, when it first came out, was accused of bending in pockets one future trend could be roll up phones. The challenge will be that electric circuits don’t like being bent but the ability to roll up you iPad and pop it in your pocket is definitely on the horizon – Apple has already filed patents.

Augmented reality has been touted as the next big thing for a while. The idea extends the concept of QR codes but uses the camera to scan something e.g. a street view — and the screen recognises it and makes suggestions about where to eat from what it sees, with price options and online reviews. Using the phone will be less intrusive than iGlasses and the technology is most robust.

The maturing VoIP market

Finally the VoIP market is starting to reach maturity partly as a result of the improving quality of broadband. Currently there are about 1.5 million VoiP connections in the UK. But with BT announcing the end of ISDN in 2025 the ongoing battle will be between SIP and VoIP. Suppliers of both services will have to adjust their marketing as they offer similar benefits.

What is clear is that Broadsoft is beginning to dominate the market in terms of the platform VoIP suppliers are choosing to use. What is also starting to emerge is that people who went to VoIP perhaps 3 – 5 years ago are now looking at whether they should change supplier. What will be key to success is the ability of providers to allow reuse of their existing handsets.

There are elements that still need to mature as VoIP applications now start to sit on multiple devices. The recent upgrade by Apple to IoS9 caused many VoIP applications to fail. In the future VoIP suppliers will need to ensure their products are more robust as the handset on the desk starts to decline in popularity.

All in all it looks like 2016 will be an interesting year in the telecoms world.