The telecom industry is on the precipice of enormous upheaval thanks to disruptive technologies, shifting consumer behavior, and other industry-wide changes, opening the doors for new entrants and potentially shaking up established hierarchies. The two previous installments in this three-part series discussed how telecommunication companies (telcos) can succeed in this new era of telecom by utilizing artificial intelligence (AI) and monetizing 5G and the Internet of Things (IoT). This last installment will provide insights to help telcos navigate today’s evolving regulatory landscape and the more significant push toward sustainability.
What the evolving regulatory landscape means for telcos
Data security and privacy are among the principal focuses of new laws and regulations. While there has yet to be one comprehensive federal law for the U.S., individual states continue to pass consumer data protection laws. This complex assortment of rules and regulations affects many industries, including telecommunications.
Data security is also a top priority across the Atlantic, with the EU’s Data Act (which entered force last year) ensuring the protection of people’s data, among other objectives. Likewise, there are mounting concerns in the UK around data protection and user rights, resulting in efforts to replace all Huawei equipment within radio networks.
These new laws and regulations, which focus on protecting people’s data and enabling them to own their data, present several challenges for telcos. Firstly, telcos must ensure they select the right partners to work with within their ecosystem, i.e., partners that will adapt to these various regulations. The second challenge is figuring out how to leverage customer data to create new propositions to enhance revenue growth while considering privacy and anonymity.
Why new entrants will benefit most from this change
Recall the second article in this three-part series, which examined the role of network virtualization, software-defined networks, and over-the-top (OTT) and how these technologies would remove many barriers, enabling new entrants into the telecom space. The article notes that established telcos will also benefit from these technologies. They would no longer be beholden to their 5G network and fiber investments, allowing for more creative offerings.
These new technologies will likewise have enormous implications from a regulatory perspective. Layers of red tape concerning data protection, accessibility, service level agreements, etc., have hamstrung traditional telecom companies—particularly large corporations. However, new entrants into the telecom space will be unencumbered by these same regulations, giving them a significant competitive advantage in terms of how they serve customers, what propositions they can offer, the infrastructure limitations they face, etc.
Sustainability strategies
Telcos account for roughly 1.6% of global carbon emissions, contributing to the Information and Communication Technology sector’s 2-4% of total global emissions. Network operators also consume a considerable amount of electricity, which will continue to increase thanks to the expected growth of mobile traffic. Telcos recognize the pressure to move toward sustainability, and many have pledged to increase their usage of green energy sources, like solar and hydropower. There is also a desire to switch to 5G technology and retire energy-inefficient legacy infrastructure. These efforts are, without a doubt, vital to the overall shift toward sustainability, but they are not the only strategies available to telcos.
There are several less lucrative but equally valuable sustainability initiatives telcos can pursue to position themselves as genuinely green organizations. One strategy is to create a more circular economy, where telcos strive to reuse, repurpose, and recycle 3G and, eventually, 4G devices, platforms and infrastructure. Maximizing the usefulness of these items is far more sustainable than outright disposing of them. Similarly, telcos can reuse materials like gold, silver, palladium and copper from e-waste to build new electronic devices. Another strategy is to store data in an environmentally friendly manner. While there is a temptation among telcos to retain massive amounts of data for as long as possible, there comes a point where the energy waste isn’t justifiable.
The power of collaboration
Telecom is undergoing nothing short of rapid transformation. Whether adjusting to new regulations or deploying meaningful sustainability strategies, keeping up with these changes can be exhausting. Without a roadmap, it’s difficult to determine if such initiatives will yield valuable results. In such cases, as with AI, 5G and IoT, working with an innovation partner is necessary to co-create and strategize for the future. Joining with the right partners will help telcos stay up-to-date and take the lead in this new era of telecom.
