The Telecoms’ Future, what will tomorrow bring us?
Luxembourg, 11 April 2013
EY presented its latest global study: “Telecoms Scenarios: How will consumers communicate in 2020?”
In the past six months, EY developed a scenario study entitled "How will consumers communicate in 2020?". Will privacy and security issues for the most part have been resolved or will the areas of Internet security and privacy be complete and utter chaos? And what will be the impact on consumers?
Yesterday, in front of 80 people and under the format of an interactive panel discussion animated by local key players, EY TMT* Experts presented, at its premises, the different foreseen scenarios for the future of the ICT Industry. This event was jointly organized with First Tuesday as part of the Wireless Wednesday series of which EY has been associated with for more than 10 years.
Olivier Lemaire, TMT Practice Leader at EY Luxembourg explained: « Organisations in almost every sector are facing rapid and unpredictable developments. This certainly holds true for the telecom sector. This makes it difficult for executives to make strategic choices, the worst pitfall being that people start planning for the short term because they can't predict long-term trends. Our scenario study furnishes a powerful tool to make robust strategic choices in a turbulent environment. Its strength is that you are compelled to consider not just a single scenario but alternative scenarios as well, and prepare for them. »
Two core uncertainties, 4 different scenarios
Thanks to 45 experts and 25 companies which participated in this study, EY collected as many relevant trends as possible. A thorough analysis then resulted in two core uncertainties, the first one being 'security and privacy'. At the one extreme end, these are 'in control', which means security and privacy issues have for the most part been resolved. At the other end, they are 'not in control' or, in other words, the areas of Internet security and privacy are complete and utter chaos. The second core uncertainty is the degree of integration of the Internet into our daily lives. At the one extreme end, this is 'fragmented', which means we use smart devices, although human intervention is still required. At the other end of the spectrum, it is 'fully integrated' or, in other words, the Internet is inextricably linked to our daily lives. Devices work together seamlessly without our intervention is being required.
Placing these two core uncertainties on the axes of a coordinate system results in the following four divergent and challenging scenarios.
The Full Speed Ahead scenario
In the Full Speed Ahead scenario, the sector has listened carefully to signals from consumers expressing their dissatisfaction with the sundry security and privacy scandals. It has thoroughly tackled these problems in a joint effort. This has led not only to self-regulation but also to a uniform standard, resulting in devices and services seamlessly tying in with each other. The consumer is at the wheel, pulling the strings and determining what party may contact them and who can not. This consumer is demanding in all respects. There is no room for inferior products.
The Roller Coaster scenario
The Roller Coaster scenario features high-speed innovation. The Internet poses no rules or other impediments. Consumers find it hard to keep up with the changes. Innovations and new services have made life easier and more comfortable. As a consequence, consumers have become dependent on the Internet to a very high degree, although it is all but safe. Consumers are monitored in everything they do and their personal data is used for all kinds of purposes. Consumers have become unconcerned by the overload of unreliable information they receive on a daily basis. People want to believe the benefits of their new lives weigh up against the disadvantages.
The Speed Limit Control scenario
After countless incidents, the government took tough measures, enacting stringent rules and regulations to get personal data safety and security under control. In this Speed Limit Control scenario, those stringent rules and regulations have impaired innovation, seriously delaying the further integration of the virtual and physical worlds. Consumers feel safe on the Internet but - literally - pay a price. Services have become not only more expensive but also less user-friendly, because identifying yourself and accepting legal terms and conditions are required in everything you do.
The Gear Down scenario
Neither the government, nor the industry managed to come up with a solution for the vast number of privacy and security incidents. Consumers have had enough and have turned against the Internet. They have lost their trust in the Internet and are afraid to use it for such sensitive services as banking and shopping. People prefer to go to real shops and to make cash payments. This Gear Down scenario is a nostalgia scenario, reflecting a longing for the old days in several respects.
These four scenarios have been debated on to arrive at the conclusion that our sector is indeed constantly evolving and that these game-changing developments have disrupted the telecom industry. These progresses originate from the use of new technologies, changes in customer behaviour and increasing regulatory requirements. All these developments create uncertainty and therefore, it is extremely difficult to forecast when and how these developments will impact our business. Uncertainty, but recent developments in our industry have aggravated the level of uncertainty. To be able to cope with this kind of uncertainty, respond appropriately and to maintain or strengthen our position in tomorrow’s market, one must understand the root causes of different kinds of developments. By using scenarios, people are forced to look beyond the “official future”.
Let’s meet once a year till 2020!
Building scenarios enable companies to operate successfully in an uncertain environment. Continual assessment of the impact of changes on the business environment and the ability to establish strategic control require a dynamic monitoring system. Such a system provides up-to-date insight into future market developments and the consequences for your business, enabling Top Management to anticipate these developments and make appropriate adjustments.
The presentation of the study by Bart Reede, Telecom Strategy Expert at EY, was followed by an interactive panel discussion between the audience and four local experts being Jean-Claude Bintz, CEO, Lakehouse S.A and amongst others, former CEO and founder of Orange Luxembourg and Tango, Lauri Paal, Director Carrier Relations at Skype, Mickael Jackson, Partner, Mangrove Capital, Jeremy Coxet, Associate Director, Vanksen. The panel was moderated by Olivier Lemaire, TMT Leader at Ernst&Young Luxembourg and EMEIA Telecom Leader.
Gael Denis, Assurance TMT Partner at EY Luxembourg and host for the evening concluded: “Despite different views, hopes, fears and concerns, panelists agreed on the continuous profound changes that the Telecom industry is going through as well as the convergence which is currently happening in the industry”
TMT*: Telecommunications, Media& Entertainment and Technology
On the web:
In tandem with a number of sector experts, EY has sketched four illustrative scenarios, which are presented in an interactive video available on http://www.ey.com/NL/nl/Industries/Telecommunications/telecoms2020