The report's opening paragraph says, "To prosper in 2016, companies must prepare for volatility in emerging markets, parsimony among consumers and governments, tightening regulations and yet more digital disruption." And regarding the telecommunications sector, this industry "is no stranger to disturbing change and 2016 will bring more of it."
The EIU report is correct to note that "with consumers increasingly accustomed to being connected at all times, operators will have to invest mightily to keep them happy." The report mentions major investments by two multinational telecom players seeking to increase connectivity among its customers while, at the same time, increasing its customer base: Vodafone's £7 billion modernization program called "Project Spring," which is "aimed at improving connections on its mobile networks." And Indian operator Bharti Airtel's 'Project Leap,' a US$9 billion investment over three years that "will upgrade legacy networks and thousands of base stations, build indoor networks and make its fixed broadband lines faster."
While internet access may be ubiquitous in the industrialized world, billions of people in emerging and developing countries still lack internet access. "Another aim of operators' investments will be reaching the swathes of the global population for whom internet access is fleeting and unaffordable," the report explains.
Furthermore, "The targets for 2020 set out by the International Telecommunications Union (ITU) include connecting more households and making telecoms services more affordable for consumers. Hence operator efforts to boost both the take-up and affordability of internet access, whether via smartphones or traditional broadband connections." And mobile broadband, through the increasingly rapid deployment of 3G and 4G connections, is widening access to mobile broadband in developing markets. In fact, 2016 internet penetration globally "is forecast to surpass 50 users per 100 people for the first time."
The internet of things (IoT), which are networks of objects linked through embedded connectivity, continues to be promoted as the next big thing. "Still," according to the report, "in 2016 companies across more industries will become more aware of its many potential applications, as the increased sophistication of 4G technology spurs the market for connected devices." Device makers, and smartphone manufacturers in particular, are facing margin pressures and decreased sales as a result of market saturation and intense competition. Those companies will need to effectively capture revenue the IoT market is expected to generate in 2016.
With respect to the continued rise of global e-commerce, the EIU report notes:
Singles Day, on November 11th, is the largest online shopping date in the world, with US$14.3bn sales in 2015 thanks chiefly to its popularity in China. Yet Singles Day could easily follow Black Friday, originally a US-only event, to go global. The force behind it, Alibaba, is expanding aggressively overseas, where ethnic Chinese are already catching on. An even earlier start to the holiday sales season beckons.Lastly, "The popularity of mobile video owes much to technological advances like bigger and better smartphone screens, and faster internet connections." Not just established companies like Facebook and YouTube, but Periscope and Vine are offering live video feeds. "Together with advertisers, these companies will seek to profit from the coming march of cheap 4G connections across India and other emerging markets."
The EIU says its report will help business leaders "pinpoint key issues and trends that will enable you to influence strategic decision-making and answer vital business questions for your organisation in 2016." What key issues and trends are valuable to your business? Are there issues affecting your business not covered in the report?
Aaron Rose serves as President and CEO of ROI3, Inc., a Seattle, Wash.-based company that empowers people in emerging economies through innovative, technology-based solutions. He is also the editor of Solutions for a Sustainable World.