Top telecom predictions for 2010

1. The smartphone becomes a search phone

While smartphones will continue to thrive, the most important battle to be waged this year is leadership in mobile search, although this may fall outside the radar screens of both analysts and the media.

Revenues from mobile search are expected to come in at a modest one – two billion Dollars, but by the end of 2010, search is likely to be one of the five most-used smartphone applications, along with voice, messaging, calendar, and browsing.

By 2011, smartphone sales are forecast to exceed all PC sales (mobile and desktop combined), with 400 million shipments. This should encourage PC manufacturers to diversify into smartphones.

By 2012, smartphone shipments could pass the half-billion mark. In the same year, search is expected to generate the bulk of the 7.2 billion Dollars mobile advertising market.

Also, some aspects of mobile search may be superior to search via PC, by the end of 2010. For example, mobile search could not only help you choose where to go for dinner, or buy a gift, but also guide you there through integrated GPS navigation, turn-by-turn or even step-by-step. The value of this function to advertisers and the providers of such services may prove lucrative.

Separately, a critical area of differentiation for users this year is likely to be the user interface. Developers need to offer a variety of user interfaces for each context. A range of technologies would need to be integrated – voice recognition for those in charge of vehicles, for instance, or visual search in instances where the search is driven by selection of images for those on foot. Existing technologies such as touch are likely to undergo constant iteration and improvement.

2. Mobile VoIP becomes a social network

Deloitte TMT predicts that in 2010, users and usage of mobile Voice over Internet Protocol (VoIP) should start to evolve from niche to mainstream, thanks to the availability of new services that blend a range of IP-based features around the mobile voice experience.

In addition to offering low-cost calls, these services will offer a wide range of functionality including one-to-many calls, broadcast voice mail, and voice-to-text.

Users of multifunction mobile VoIP services should reach tens of millions by the end of 2010.

3. Widening the bottleneck: telecom technology helps decongest the mobile network

At the start of 2010, there should be about 600 million mobile broadband connections between laptops, netbooks, and smartphones.

As a result, global cellular data wireless networks will have gone from underutilization to congestion, the wireless equivalent of traffic jams, in 18 months. As a result, wireless providers are now addressing insufficient network capacity.

By 2014, network capacity issues should be dealt with by 4G technologies, but in most service areas, neither of those technologies will be fully deployed in 2010.

The challenge for carriers is determining what to do in the interim. And the problem is likely to get much worse as smartphones continue to take share and new high-bandwidth devices like netTabs become popular.

4. Carriers change data pricing and make regulators happy

There is a strong need for more rational pricing, especially in the mobile market.

Although consumers are signing up for broadband in record numbers, often encouraged by flat-rate pricing, networks are becoming congested and are either running slowly or denying access entirely. Unhappy customers are voicing their displeasure — but seem unwilling to pay more to improve service.

This phenomenon is most obvious on smartphone-congested mobile networks, but even high-speed landline broadband is beginning to bump up against capacity - especially as usage patterns shift. Where peak usage once occurred from 6pm to 11pm, it is now two hours shorter, from 7pm to 10pm.

In 2010, North American network operators - both wireless and wireline - will likely move away from “all you can eat” data pricing plans. Instead, some customers will almost certainly be billed for how much data they use, and may even be charged for when they use it and also what kind of data is being used. These new pricing schemes will likely be encouraged by regulators.

5. Nixing the nines: reliability redefined and reassessed

A key requirement for both providers and customers is to understand exactly what is meant, or implied, by service levels. Enterprises might become increasingly pragmatic about their need for quality of service in the telecommunications services they acquire, this year. A principal driver for this change is cost. A fragile economic recovery this year is likely to keep businesses focused on identifying unnecessary products or services.

The telecommunications industry, mainly suppliers and their direct customers, may want to move to a more easily understood commitment. For example, they may select to identify an acceptable number of hours of downtime per period rather than an availability level expressed in the form of decimal points. This approach may make it easier to determine need as well as feasibility.

IT and telecommunications departments, which are typically responsible for agreeing to service level agreements, should constantly review internal users’ requirements and tolerance levels for downtime.

6. Contract 2.0: long-term solutions shorten and multiply

Best practices in telecommunications and technology procurement have generally favored long-term (up to 10 years) solutions-based contracts. For the supplier, long-term contracts enabled a steady flow of income. For the customer, it ensured better quality and lower costs. In 2008, the value of major (worth 1 billion Dollars or more) long-term technology or telecommunications contracts signed was 17.1 billion Dollars.

While enterprises’ demand for telecommunications solutions will rise, contract terms will shorten from about 5 – 10 years to a minimum of about three years. A sustained enterprise focus on costs is likely to stoke demand for solutions.

The uncertain economic outlook and a general lessening of loyalty to technology platforms and providers are likely to keep contract lengths short. In a few cases, suppliers and customers may even decide that the most effective way to agree on price would be to revert to pay-per-use.

7. The line goes leaner. And greener

In 2010, the global telecommunications sector is likely to focus heavily on reducing direct and indirect CO2 emissions. The global telecommunications industry, serving over four billion customers with an average of 1.5 lines each, generates 183 million tons of CO2 annually. This amounts to about 0.7 percent of global emissions, a carbon footprint that compares favorably with the automotive and aviation sectors.

Operators’ focus on reducing emissions will be driven by two key factors, with cost being the common denominator. In developed countries, a primary motivation for making lines lean will be cost reduction. In developing countries, where networks are still adding subscribers, cost control is likely to be the imperative.

Equipment manufacturers should continue all possible approaches to improving network efficiency. For example, networks are normally powered at all times, even though their usage varies. Most networks are largely idle at night — at these times and other periods of low usage, networks should be powered down.

In addition to reducing internal energy consumption, the mobile industry should remain focused on reducing indirect energy consumption. Initiatives such as turning off chargers once phone batteries are full and setting a single standard for chargers could have a massive impact.