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Big Data: Currency 2020
Published on 07/29/2016 | Market Sizing
HP Matter released a great article on their top technical disruptions for 2020. While I believe their forecasts for the telecommunications industry were a bit extreme, their forecasts were not off-base. The telecommunications industry has long become commoditized. WebRTC, and other open protocols, are enabling communication via the internet like never before. The products that the telecom giants offer simply don’t hold any value anymore. With this said, the telecommunications business model is not going away; their product is simply changing. To what - Data.
In December 2009, data traffic on mobile networks first surpassed voice traffic, and has since exploded. By 2016, data traffic will be 200 times greater than voice traffic.
When you think about it, “data” is already a main product provided by your local telecom provider. You buy a cutting-edge mobile device at a discount rate for what?- to consum large sums of data. While it may seem archaic, it's likely to only get worse. The control of data is the main strategy for annuity generation of Telecom giants like Vodafone Telefonica, At&t and China Mobile. Their very future depends on their ability to control it and bill for it. Cloud services offered by Google and Apple are getting in on the “bill for data” game as well. Content distribution and targeted advertising is secondary to data acquisition, bandwidth control and real-time analytics. Why is this happening?
Data as a Currency
As consumers, we are positioning ourselves into a realm of dependency on cloud services and streaming data. We store our photos and videos in the cloud as if it was the family photo album. We even rent our music (even though we think we're buying it) on the cloud. Our social identity largely exists atop cloud services and; once again, this trend shows no sign of slowing down. In the modern world, data is the mode to productivity, entertainment and social interaction. Those who control bandwidth, in turn control the primary delivery channel for communication and entertainment services. Mobile devices are the surging medium in which data is consumed. Telecom companies can no longer control how the connections are drawn over the cloud, but they are sure making an effort to control the roads that those connections use.
Achieving maximum consumer acquisition can be analogized to the rush of claims at Sutter’s Mill during the California gold rush of 1848. Telecom giants are looking to buy-up companies or ideas having to do with alternative modes of digital communication. Investing in high-tech application development that will expand their content ownership of streaming peer-to-peer video services, or by lobbying governments for increased internet regulation laws, are the primary modes from which Telecom will aquire change in 2020.
Follow the Money
HP hypothesizes that by 2020, it is likely that at least one of the world’s telecom giants will be acquired by a content company. I'm not so sure. When you follow the money, Telecom companies still have a lot of it. They see the writing on the wall and understand that the value they have long provided to the consumer is going away. Rather than riding a downward slide into irrelevancy, the Telecom industry is putting their money where their mouths are by acquiring new companies and technologies as quickly as they can. They are investing heavily in new exciting technologies, such as the WebRTC technology, while lobbying various governments for increased internet traffic regulation. Whatever the pursuit, the objective for many of the world's telecom companies far outreaches that of content. Telecom companies seek control of the one asset that they require - once again, Data.
While the Jetsonian claims made from HP may not be so far-fetched, I believe in the power of money. Most of all, I believe that the desperation of those who have lots of money who want to keep it, far outpaces the value of content distribution. Thus, I think we are going to see a sincere effort by the Telecom giants of the world to react with greater agility than the music industry of the last decade. When you review the 6 identified disruptions of 2020 from HP, the one common asset that can be monetized across media and industry alike, is data flow and supply, not media consumption.
Top 6 Disruptions to the Telecom Industry
HP sites six major disruptions to the Telecom Industry by 2020, and here they are:
2. Thingification (Internet of Things)
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