Inside telecommunications Issue 12

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EY - Portrait of Jonathan Dharmapalan

In this issue, we consider a number of industry themes, from innovations in mobile payments and advertising platforms to wearable devices and technology developments in super-fast broadband.

Jonathan Dharmapalan
Global Telecommunications Leader



Deal activity remains on the rise in the telecommunications sector, which is bracing itself for a new round of consolidation in core markets as operators also consider moves into adjacent areas. Yet while regulators continue to mull over consolidation scenarios, technology providers are keen to strengthen their footholds in growth areas too — and operator relationships with over-the-top (OTT) players was a leading theme at this year’s Mobile World Congress in Barcelona.

All told, 2013 was a bumper year for deals across technology, media and telecommunications, with global deal value hitting US$510.3 billion, an increase of 54% on the preceding year. Looking ahead, growing enterprise demands for cloud and mobility, coupled with high innovation rates in mobile retail and social networking, are likely to trigger further transactions as the lines blur between industry sub-segments.

While operators are considering how far they can adapt to new ecosystems that straddle different industry verticals, their relationships with web and technology giants is coming under ever more scrutiny. How operators position themselves for growth will be considered ever more closely as a result.

However, it’s easy to forget the importance of innovation in core market segments. Operators have long been looking for ways to mitigate costly upgrades to super-fast broadband infrastructure, particularly in Western markets, where the pace of change has underperformed other regions.

Innovative technologies have an important role to play in easing the migration path to more robust infrastructure that can handle the growing data demands of end users, whether consumers or businesses. However, the future-proofing of networks is no easy task, particularly as technology cycles shorten.

The move from the laboratory to a fully fledged commercial proposition is by no means guaranteed, but such innovations demonstrate how the telecommunications sector remains the scene of considerable technological innovation. At the same time, disruptive service providers remain a solid feature of the industry landscape.

Service pricing remains another area where operators are experimenting in droves. Family and shared data plans have been in place for some time in the US, yet the pace of change is quickening, with recent developments in machine-to-machine pricing and AT&T’s launch of sponsored data underlining that service providers just cannot stand still as they look for the optimal mix of pricing options for mobile data.

EY - Adrian Baschnonga

Adrian Baschnonga
Lead Analyst
Global Telecommunications Center