3 Top Trends That Will Affect Telecom in 2014

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

3 Top Trends That Will Affect Telecom in 2014

I was reading the Stratfor intelligence newsletter with its Top 5 Trends That Will Shape 2014. It's an interesting list.

  1. An enduring detente between Iran and the United States
  2. The rise of nationalist and extremist parties in Europe
  3. Russia and Germany bargain over Central/Eastern Europe and energy policy
  4. China's return to strongman politics
  5. Domestic turmoil and economic stress in India and Turkey

Another article mentioned that Israel is having a water shortage. People joke about water being what we fight the next world war over, but it isn't much of a joke.

And another article noted that Saudi Arabia was deporting immigrants. It's nice to see that it isn't just the US, right?

So I started thinking about what trends were going to affect Telecom in 2014. We know that it will be more cloud, but what we will also see is more security breaches. The first trend is that companies do not take security seriously. (Privacy even less.) As more corporate data moves to the cloud -- and it doesn't matter if it is private or public cloud -- companies will only spend enough on security to tell themselves that they are fine.

In 2013, we saw a few cloud storage companies get out of the business. We aren't done. There are too many players in cloud services, a CAPEX intensive business, that are not getting a return on expenditure. Think about this: some debt tied to the equipment costs, a little revenue, bills for collocation and bandwidth, and payroll costs. Cuts will come - in the form of security, labor (skills), data back-up, maintenance, etc. The trend will be toward more security breaches and some consolidation.

The nice thing about consolidation, it gives rise to the trend of more unemployment. As we enter the age of robotics, the trend toward automation will continue, resulting in leaner (over-worked) staffs, less customer support and ultimately more churn (due to support and security issues).

If the Target breach taught us anything, it should be to ask what companies are doing to protect our data. Seems obvious in an environment running into the cloud. "This isn't so much a technology issues as it is a people and policy issue." Security is not a priority for corporations. Maybe the 100+ lawsuits and fines will change that going forward. That would be a trend I would like to see.

A lot of the security and privacy argument centers around the same thing the minimum wage argument does: prices. When companies focus solely on the price of goods and services and their margins, all is lost. It's a commodity game. No thought to the Value at all. That is a trend that will continue, since as a nation we reward profits above all else. Just ask the execs at HSBC, who laundered drug money but were fined 5 weeks pay!

With ARPU not rising fast enough for the Duopoly, raising revenue will need to come from adding more subscribers (also known as Organic Revenue). How do the carriers do that? Most markets are just take-aways -- another carrier is gaining revenue or subscribers at the expense of another carrier. Whether it is FiOS or U-Verse gaining TV subs from DirecTV or Comcast or its ATT or VZW gaining subs from Sprint, this is a trend that won't end.

Smaller players will have organic revenue issues as well. Smaller cell companies (and MVNOs) are losing customers due to the smartphone models that they can offer. Smaller VoIP companies are losing deals to providers with brand names.

We hear about customer engagement and social media -- and we will hear about it in 2014 starting at ITEXPO in Miami next month -- but many service providers forget that value and branding are the necessary ingredients to revenue. I don't see many companies jumping on the marketing wagon in 2014. For many it is a lack of funds. I'm not certain that executives think an investment in Marketing is worthwhile. Just like they don't think an investment in security is worthwhile. It's not a smart way to do business.

The trend is to keep an eye on revenue and not much else. We will hear the same stuff in 2014: WebRTC, UC, cloud, wearable tech, video, Big Data, XaaS, spectrum, channel and even some SDN. Lots of more of the same. Happy New Year! Hope to see you in Miami Beach at ITEXPO!



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