With technology being relied upon more than ever due to 2020's pandemic, Paul Budde takes a look at how this has affected the ICT industry in 2021.
COVID-19 will remain a key factor in industry developments
While 2021 will remain a year with lots of uncertainties, at the same we can say that the pandemic has not affected the information and communications technology (ICT) industry in any significant way. Yes, there has been a slowdown, for example, in the sale of smartphones. Shortages in both materials and expertise are slowing the deployment of fibre and the recovery over 2021 will be slow and uncertain because of the many lockdowns and travel restrictions.
However, in general, the pandemic has propelled the industry to the forefront of policies and strategies aimed at limiting the negative effects of the pandemic. We have been able to work and study from home, be it that for many people this has been far from ideal, but also for those people it has been better than nothing. On the other hand, many people and businesses have tasted the positives of working from home and there is no doubt it will become a permanent feature in many organisations.
The same applies to healthcare services; imagine what would the social and economic consequences would have been if we did not have the technologies that are nowadays available to us.
The reality of 2021 is that to a large extent, this situation will continue. It will take a year to have sufficient people vaccinated to return to a more normal life. At the same time, during this period, the above-mentioned services will be further developed and will increasingly become part of the overall traditional way of work, education, healthcare, shopping and so on.
Going forward, we will see more self-serve and no-touch options. This will have a positive effect on the development of smart homes, buildings and cities. However, we also need to address job losses because of it. It might take a decade or more, but the road to some sort of a universal income is inevitable.
A range of new businesses has been set up that is now solely based on online services and especially around video-based services such as Zoom. These services are set to stay with us as there will be more demand for them, with or without a pandemic. Expect lots of new innovations in these video-based services.
Businesses and government institutions will have to incorporate online activities in order to build resilience in the economy and society to confront further outbreaks or other disruption, for example, as a result of climate change.
NBN — critical infrastructure, underpinning the countries resilience
The NBN will remain essential infrastructure needed to underpin the economic and social resilience of the country. The upgrade towards FttH will start in 2021 and the current weak spots will be weeded out of the network. It is unlikely that the Government, therefore, will any time soon consider the privatisation of the NBN or any other major change to its NBN policy.
This will mean more pain for the industry as the Government will rely on NBN Co to fund the upgrades themselves. As a result, there will be an ongoing margin squeeze for retail service providers (RSPs). NBN Co has an infrastructure monopoly and the RSPs do have no other way than to accept the prices that NBN Co needs to recoup its overpriced NBN infrastructure.
The only bright spot here is that the ACCC has indicated that they will become more involved in the price setting of the wholesale services. However, the Minister for Communications seems to be willing to intervene to ensure that NBN Co is not getting too many obstacles. So, there is a potential clash of interest to be expected.
5G essential OPEX tool for operators
5G will remain in the spotlight and the hype around this technology will continue. There is still nowhere in the world a clear business model for 5G other than it will over time replace 4G because 5G is more efficient and is saving the industry operational costs. The mobile companies need 5G to stay competitive. It will be interesting to see if more solid business models will be developed for the promising internet of things (IoT) services, beyond niche market applications.
What will be interesting is that 5G could lead to a disaggregation of the mobile operators. Telstra has already indicated moves in that direction, with plans to split fixed infrastructure, mobile towers and services in separate companies. This could over time lead to significant changes to the makeup of the landscape of the industry. More freedom would be provided for companies who do want to deploy 5G for their internal use, especially when it starts to become clearer if and when and in particular what sort of IoT services are becoming available.
New kid on the block — Wi-Fi 6
An interesting development is also the arrival of Wi-Fi 6. This is a new upgrade to Wi-Fi. The promise is to turn Wi-Fi from a two-lane highway to an eight-lane highway. It is heralded as the biggest upgrade to Wi-Fi in 20 years and connections should be faster and a lot more reliable because of it.
The first wave of certified Wi-Fi 6 products (based on the 802.11ax standard) is set to enter the market in the coming months. The new technology will be embedded in phones, PCs and laptops. Wi-Fi 6-supported TVs and VR devices are expected to arrive by the middle of the year.
Further predictions include:
- globally, more mobile mergers are to be expected;
- overall, the global telecoms industry will continue to decline (between 1-3 per cent) — it might recoup some of its 2020 losses during 2021;
- fixed broadband will always win from mobile broadband — there are short term and niche market opportunities in areas where there is (still) only poor fixed broadband available;
- the I.T. side of the industry will continue to see significant growth, especially in cloud computing, data analytics, data centres;
- OTT entertainment such as Netflix, Stan, YouTube and Disney Plus will continue to increase, while traditional pay TV will continue to decline;
- telehealth and tele-education will receive more attention from the professionals in these industries and the services will become more sophisticated;
- regulations will be implemented to address fake news, disinformation and the misuse of social media;
- on the negative side, we might see one or two major cyber-attacks (such as loss of power/internet to a major city as well as a continuation of a range of smaller attacks); and
- China will increase its share in the global technology industry and will become the technical leader in many areas.
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