5 Emerging Telecommunications Industry Trends To Watch In 2020

From emerging technologies, like 5G and SD-WAN, to M&A activity, here are the five biggest forces that will be making their impact on the telecom market in 2020.

Telecom 2020

The telecommunications industry isn’t made up of legacy service providers peddling pricey phone and television offerings anymore. Emerging and promising technologies, like 5G and SD-WAN, are evolving the market and making the competition fiercer, and it’s also paving the way for startups and niche providers to enter the scene while some of the market giants look to come together to stay relevant.

At the same time, some of the industry’s largest carriers see a need to return to their core telecom roots to boost maximum profitability and empower their customers to connect more endpoints. From M&A activity, to next-generation technologies and use cases, here are the five biggest telecommunications industry trends that will be making their impact on the market in 2020.

5G Making Moves

The fifth-generation of wireless technology, 5G, is gradually working its way onto the telecom scene and promises faster download speeds, very high network reliability and a big impact on daily life for both consumers and businesses, especially as technologies like 5G make brand-new use cases possible, like smart cities and self-driving cars.

Service providers are already building out their 5G networks with plans to ramp up these efforts in 2020. AT&T is currently offering 5G services to mobile customers in parts of 21 cities across the U.S. The carrier's CEO Randall Stephenson in July said that AT&T is on track for nationwide 5G coverage in the first half of 2020. Verizon said by the end of 2019 its service will be live in parts of 30 cities. T-Mobile, for its part, said its 5G network, which is built on the company’s 600 MHz band of spectrum will launch during the first week of December.

Focus On Core Telecom Services

Two of the country's largest telecom providers are intent on focusing on their core telecom services and the trend should only increase heading into the coming year.

Basking Ridge, N.J.-based Verizon in 2018 announced it would "refocus" itself around network transformation, fiber, and 5G in an effort that CEO Hans Vestburg called "Verizon 2.0," which the company said in August is paying off.

Activist investor Elliott Management in September sent an open letter to AT&T with ideas on how to help the Dallas-based carrier return to its telecommunications roots after it revealed a $3.2 billion stake in AT&T. The carrier in October said it is working with Elliott and announced its capital allocation plan which promises a disciplined review of its portfolio and no major acquisitions for the next several years.

IoT Advancement

Arguably one of the most significant trends to impact the telecom industry is the Internet of Things, which connects devices, endpoints, and assets that have never before been able to communicate with a network. By 2020, connected devices across all technologies will reach to 20.6 billion, according to a report from market research firm Gartner.

IoT is quickly becoming a blossoming source of revenue for the carriers, too, and those numbers are only expected to grow as service providers project growth in IoT revenues heading into 2020.

Rise Of SD-WAN

As service providers focus on their core telecom and networking services, they'll be relying on SD-WAN more and more for intelligent path control and traffic-steering based on the application. At the same time, these providers are also selling SD-WAN to their end customers, too. Carriers and cable giants, including AT&T, CenturyLink, Comcast, and Verizon have all mentioned SD-WAN as one of their strategic IT solutions that are leading in their business customer segments.

SD-WAN and secure SD-WAN managed services have also become a huge solution for the channel as customers rethink their network infrastructure and expand to reach new locations or handle more traffic at network edge. IDC has predicted that the SD-WAN infrastructure market will grow to $4.5 billion by 2022.

Consolidation To Continue

While the two top telecoms in the U.S. have publicly said they will slow down their buying sprees, or even in the case of AT&T, stop making acquisitions for the next couple of years, the current political climate is being viewed as merger-friendly after AT&T was granted permission to acquire Time Warner in a $85.4 billion mega-deal in 2018. The decision was later upheld by a federal appeals judge in 2019.

The third and fourth largest wireless carriers in the U.S., Sprint and T-Mobile, are expected to come together early next year after the two companies were granted approval by the FCC in November.