By Martin Creaner, President and CEO, TM Forum

Over the past five years as smartphones and tablet computers have taken markets around the world by storm, the number of digital services has grown rapidly just to keep up with demand.

Besides items you find in an app store for your iPhone or Android device, so many other things have become digitised, including books, music and movies.

As voice revenues continue to dwindle, service providers are looking beyond traditional services to the next moneymakers.

I recently heard a description of the future which is incredibly relevant to our industry: “…the future is a place where our children will work for companies that don’t exist today; delivering products that don’t exist today; to solve problems that don’t exist today….”

While we can’t imagine the details of the companies or products or problems that we will all face in the future, we can be sure that a digital services ecosystem will exist to deliver it all to an increasingly demanding group of consumers.

As the number and types of devices grows faster than we can imagine, it’s not hard to see a time when everything that can be digitised will be digitised.

This will take us from “early-adopter” opportunities, such as e-books and MP3 music files, to mass-market healthcare, telematics for automobiles, smart grid, financial transactions and things we can’t possibly imagine.

If we say the global communications market is currently worth around $2 trillion, I expect to see growth of a factor of three to five times over the next 10 years when the communications industry becomes redefined as the digital services ecosystem that underpins the delivery of all digitsed services into every industry on the planet. 

As part of this evolution, we’re already beginning to see a huge amount of consolidation in the infrastructure market.

Very soon, instead of seeing hundreds if not thousands of companies providing the core infrastructure across the world, I expect to see a handful of consolidated infrastructure providers dominating the market.

Some will be the familiar current big infrastructure providers, others will be challengers from adjacent industries and some will even be run by governments, such as Australia’s NBN Co and Singapore’s Next Gen NBN initiatives.

Sitting on top of these massive infrastructure players will be tens of thousands of service providers who are creating services that the industry needs.

On top of that will be a number of retailers who deliver these services to end customers.

But as we all know, with today’s digital services – such as Netflix, iTunes and others – the winners to date haven’t been the telcos at all.

And with a new wave of services emerging over the next several years, it’ll be very interesting to see if the telcos can hold onto one or more of these services, or if those services will instead go over the top.

The nightmare scenario for the telcos is that they are left with very little to do in the new digital services world.

For example, financial transactions, such as those enabled by NFC chips embedded in phones, could easily become a business deal between the consumer and the merchant directly, entirely bypassing the telcos.

But telcos have a massive opportunity if they can grasp it. This is their wake-up call, their call to arms and any other cliché thrown in for good measure. Because if they don’t seize the moment, the opportunity will sail right past them like so many others have already.

Let me finish with a thought about value chains. The emerging ecosystem that we are all trying to understand is nothing more than a massive value chain, and the companies that survive and thrive over the next few years are going to be the ones that work out how to play well and effectively in this new value chain.

Ultimately, the only way you get to play in a value chain is if you add “value”. So for telcos, their first step in addressing this digital ecosystem of the future is to work out what value they plan to add.

TM Forum's Management World is being held in Dublin on 22-24 May. European Communications will be reporting from the event and live tweeting the keynote speeches. Follow us @eurocomms to keep up with all the news.

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