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Telco revs set to increase, but suppliers face critical challenges in 2020

Potential good times set to roll for telecoms industry in 2020, with SD-WAN first deployments of 5G, but NB-IoT needs to gain traction to stay relevant, says research

In its outlook for 2020, research firm Analysys Mason is predicting good potential for the worldwide telecoms market as businesses expand their portfolios, but it cautioned that operators and suppliers will see a year with key issues that need to be resolved.

Overall, the company believes telcos will have to adopt new operating models and automation technologies to cope with financial pressure and digital disruption.

Despite 2020 being branded by many as the year of 5G, Analysys Mason predicted that the full 5G experience of speed, reliability and low latency will still be a few years in the future, even if faster-than-expected network upgrades to early versions of 5G will underpin a critical year in select use cases. It said that this could be as much as a make-or-break year for some internet of things (IoT) networking technologies.

The company said that telecoms providers have upgraded networks to 5G more quickly than expected in 2019, but so-called “full 5G”, which promises improved reliability and latency as well as speed, will be limited to pilot trials in 2020 and the market is unlikely to see many radical new use cases. It forecast 5G to look more like a gradual evolution of 4G in 2020 rather than anything more revolutionary.

As regards to IoT, Analysys Mason believes that if government austerity programmes end – notably in the US, UK and some other European countries – then it will look for signs of greater investment in widespread public sector IoT programmes that will give the technology a major boost.

Narrowband (NB) IoT is among the technologies that the analyst predicted a make-or-break year for in 2020. Even though it has some confidence that the networking technology could finally start to deliver, the analyst warned that if NB-IoT does not gain traction in 2020, then operators and suppliers may question whether demand will ever emerge.

Analysys Mason also anticipated that more service providers will offer services based on software-defined wide-area networks (SD-WAN), which will likely move beyond early adopters to the mass market. However, it is also probable that operators will face competition in this area from bodies such as cyber security and software suppliers.

 “Across the telecoms, media and technology landscape, much of the focus and hype in 2020 will remain on 5G, but the experience is still likely to be ‘4G-plus’,” said Analysys Mason research director Tom Rebbeck, on his company’s prospects for 2020.

“Despite this, we should see real signs of traction in many other networking and connectivity technologies, such as SD-WAN and NB-IoT. In the business market, we expect that many operators will look to expand their IT portfolios.”

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