It’s all changing so fast! Now that the country has officially declared that we’ve been in a recession since December 2007, the way people will make decisions impacting the bottom-line, albeit personal or business, will change over the next 12 months to 2 years. As the financial news continues to be bleak as individuals ‘Made-off’ with billions of dollars – I wonder ‘where did it all go?’ Unfortunately by the time any money re-appears, we’ll be way past the effects on our economy.
Now I wonder, with President-elect Barak Obama gearing up to take his oath of office, and a new year upon us – how might 2009 effect the Telecom industry? In no particular order, here are my Telecom Predictions for 2009:
1. Escapism will increase. What do I mean? The retreat into what we think is ‘free’ entertainment will increase. This will effect our Television watching and Internet use and I predict an increase in both (though AT&T’s broadband division expects dismal results due to belt-tightening and less homes wanting/needing to be enabled). With individuals spending less on movies, vacations and other leisure activities, self-entertainment through the traditional public channels and seemingly free Internet access will provide an opportunity for growth at cable companies and Internet backbone providers and services providers (ISPs). Not growth in users per se, but growth in demand for quality programming, more bandwidth to enable ‘free’ downloads.
2. Mobile phone use will level off. As rate plans become expensive and user experience becomes more text and data driven, mobile phone use for traditional voice communication will level off while data use will increase. Unfortunately this will impact major mobile phone providers and the landscape of the industry will change. Not just from a provider stand-point but from an equipment/hand-set standpoint as well. Emerging hand-set players (such as Google and Apple) will continue to gain market share from traditional providers such as Nokia, Samsung and LG. And there are new hand-sets still to come (did I buy my iPhone too early?).
3. Video calls will increase. Yeah, we’ve been saying this for years now, but with the fact that it’s relatively easy and cost-effective to make video calls, more people will be open to adopting this new technology from a consumer level. In addition, the improvement of webcams and affordability make it a much more popular option than jumping on an airplane to visit the family. Now for corporate users, I don’t think there will be much of an impact here. The hope is that more companies will adopt video streaming so that they can hold global meetings more cost effectively. The companies that already do this will continue to do so, the companies that haven’t will be slower to adopt. Why? Because they’ve been doing business so long without it that there are other areas they would prefer to spend their IT budgets on, of which these budgets will continue to shrink.
4. Telecom customer service representatives will need to increase their tolerance for dealing with unhappy customers. In 2009, I predict that more customers will complain about their service, not necessarily because it was any worse than it was in 2008, but because they need to vent their frustrations to someone, somewhere and somehow. When an individual has a hard time logging into their Internet or receives a bill for an exorbitant fee for a phone call made to, say Kenya for instance, more people – especially now that more people are watching their dimes and nickels – will pick up the phone and rant and rave. This is just human nature. So next time you find yourself taking it out on the guy/gal in India answering your call – remember they are innocent!
5. Outsourcing of IT and Telecom functions will increase. Ultimately it is a numbers play here. If the cost is too high to keep staff and experts on hand to manage certain aspects of your business, then the alternative in outsourcing is a better option. Let’s take into consideration the dwindling margins on Wholesale International Voice Termination services. As margins continue to fall, the cost to maintain a staff of provisioners, technicians, sales and business development personnel are going to directly impact a company’s bottom line. More importantly for companies already operating on tight margins, low 20′s to maybe 30 percent margins [if you're lucky], a few percentage points on your least cost routing table will impact you significantly. Alternative solutions will become necessary as companies look to protect their coveted bottom-line. This includes outsourcing technicians, who can bill hourly for services rendered, managed services, least cost routing, Internet transit and more [i.e. public relations and marketing]. You name it, there’s already a way to outsource it in Telecom – start your due diligence now, it will save your business in the end.
6. Employees will be asked to do more, earn less and justify their roles in the organization with more enthusiasm than ever before. Forget bonuses, focus on keeping health insurance and other benefits. Perhaps even Friday lunches or a team dinner now and then – but bonuses? fuggedaboutit!
7. Surprised company shake-ups. Yes, there will be plenty this year! Based on what I’ve been reading, I would say look for serious changes at these companies in 2009: Cisco, AT&T, Qwest, Verizon, Juniper, Ericsson, Tellabs, Nortel, Sprint, Alcatel – just to name a few you would recognize.
On the lighter side, there are quite a few businesses that are poised for success. Cloud computing and virtualization have received a tremendous amount of buzz in 2008. This will continue into at least the first half of 2009. The change will occur as more companies adopt this new way of doing business and achieve substantial cost savings, companies will begin to form their own opinions and will suddenly become ‘experts.’ Since we all know, once you use something you will indeed become an instant expert!
And so it goes, there is a lot I haven’t touched on in this blog. If you’ve read this far -I thank you and welcome your comments. Let me know what you’d like to see next. My crystal ball needs to be shaken up every now and again (even if it’s just to let it snow!).
Happy New Year!
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