Inside telecommunications Issue 12


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Wearable technology comes of age

Explosive growth forecast in the market for wearable devices is one of the key themes for the technology sector in 2014.

Currently, wearable fitness and health activity trackers dominate this emerging category, with the market for smart watches and glasses at an earlier stage of development.

EY - wearable technology in different markets

Wearable devices are expected to drive growth across a number of technology sub-segments. Moreover, while smartphones are the principal companion device for wearable gadgets at present, wireless connectivity through Wi-Fi or cellular modules will become increasingly important, signaling new opportunities for specialist vendors.

Wristbands and glasses are the preferred form factors for the majority of end users, yet many consumers deem invasion of privacy a very real threat. For their part, mobile operators will need to ensure that they understand end users’ shifting attitudes as they look to harness wearable device capabilities as part of their own service offerings.

Device management capabilities must evolve to keep pace with the different device types being added to the network, while the analytics underpinning different use cases is also likely to prove lucrative in years to come. New wearable devices will also impact service provider pricing and subsidy models — perhaps through bundling data packages with particular devices, or reselling low-cost, mass-market gadgets.

Looking ahead, partnering frameworks should also be revisited as wearable devices alter consumer demands. While tie-ups with specialist device manufacturers will no doubt increase in importance on a per-vertical basis, relationships with fashion and sports brands may also provide upside in the long term as a range of players look to take advantage of these new form factors.

New technologies improve the economics of super-fast broadband rollouts

Faced with ongoing policy imperatives to roll out high-speed infrastructure, operators are seeking new ways to alleviate the burdensome costs associated with fiber rollout. While LTE infrastructure has been quickly deployed in the wake of spectrum auctions, fiber investment has lagged expectations in recent years, a situation exacerbated by a reduction in public funding.

In this light, operators are seeking new ways of maximizing technology performance levels in order to speed coverage growth cost-effectively. At present, very-high-bit-rate digital subscriber line (VDSL) technology is the fastest-growing NGA infrastructure in Europe.

Crucially, a number of technologies now exist to help operators extract improved performance from VDSL technology: line bonding, vectoring and phantom mode. Of the three, vectoring signals the greatest opportunity.

Beyond vectoring, even newer technologies are emerging for the benefit of fiber deployments involving copper. Chinese vendor Huawei has pioneered the use of G.Fast technology, which enables VDSL networks to provide speeds of up to 1,000Mbps.

All told, such developments herald many positives for operators, allowing them to extend the life of their copper networks. However, the improved economics of fiber rollout bring attendant challenges.

Looking ahead, the prognosis for new broadband access technologies remains highly positive. However, all players will need to carefully consider their deployment strategies.