Tech firms relying on telcos for connectivity not value added services, says ABI Research

ABI Research has conducted a survey to find out preferences of technology implementers using B2B technologies – and found 55% of respondents preferred to use telcos only for connectivity purposes.

Dimitris Mavrakis, Research Director at ABI Research, said: "The connectivity market is, and will, remain, profitable for many telcos worldwide, but our survey indicates that there is some interest by technology implementers in more than pure connectivity. This is what we refer to as Connectivity+."

31% of those polled were inclined to select Connectivity+, which allows telcos to bundle value-added, vertical-specific services on top of connectivity. Only 13% of survey respondents expected telcos to create new ecosystems for IoT, data-related, IT, and cloud services.

Usage of telcos for cloud-computing services is expected to decrease to 1% in the coming five years from the current usage among 4% of the respondents, according to the research, while usage of hybrid cloud, which is currently reported by 12% of the respondents, is expected to increase to 38% in the coming five years. The survey also concluded that telcos would not be able to compete with web-scale companies for cloud-computing services.

Mavrakis added: "Verizon has done well to offload its cloud businesses and other Tier One telcos will follow. Competing with Web-scale companies in their own field is impossible for telcos. Implementer requirements and telco strategies seem to be disparate for the moment. For example, telcos are focusing on the automotive vertical, but our survey indicates that the retail, government, and logistics markets are very interested in telco services."

Elsewhere, SNS Research has reported that mobile operators are expected to spend more than $21 billion on standardised 5G New Radio infrastructure by the end of 2025 growing at a CAGR of approximately 70% between 2019 and 2025. An additional amount of over $7 billion on NextGen core and transport networking infrastructure is expected to be invested in the market. Mobile operators and vendors are exploring various R&D options to develop 5G network wherein the first standardised deployments are expected to be commercialised by 2019 with the implementation-ready version of the 3GPP's initial 5G specifications to be released by March 2018.

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