Ahead of Total Telecom Congress 2022, we spoke to Matt Hatton – Founding Partner at Transforma Insights to hear his take on the changing enterprise connectivity market.

From your perspective, how do telcos need to evolve to remain competitive in the modern connectivity ecosystem?

The key thing for telcos is knowing where they have the right to play themselves, where they need to harness third parties, and which bits of the market they should leave well alone. At Transforma Insights we focus a lot on the IoT market, and particularly the role of the telco in it. In IoT there’s a lot of price pressure (as there is everywhere!) to the point where we talk about $1 IoT, the idea that pretty soon there will be a big chunk of the cellular IoT market generating just $1 per year. How do telcos cope with that. Some would recommend a universal panacea of ‘moving up the stack’ and selling end-to-end solutions. After all, the actual applications accounts for 70-80% of the revenue in IoT, versus 5-10% (and shrinking) being connectivity. An obvious solution, and completely wrong. That bit of the market is fiercely contested with incumbent players with mature products, decades of experience and established channels to market. There are opportunities there, but only where the telco has carved out a ‘right to play’, which will apply in some cases, but certainly not all. Regarding harnessing third parties, we’ve recently completed some research on how telcos should work with the hyperscale cloud providers, rather than necessarily fearing them. The key is to put significant value-added wrappers around the core commoditised cloud computing functionality.

You’ll be chairing the Enabling Enterprise Track at Total Telecom Congress. There’s a lot of talk about the importance of private 5G for enterprise connectivity – how important will private 5G be?

We need to be a little careful not to get too carried away. It’s certainly the hottest part of enterprise 5G at the moment. But in our recent report on MPN, published just in October, we found that 80%+ of private networks are still 4G. We’re yet to see the use cases that will really use that extra functionality (and it’s good, particularly for reliability and low latency). It’s new, and it was always going to take time. The bottom line with MPN is that the functionality is great, but the networks and devices are typically an order of magnitude more expensive than alternatives, meaning that you’ve have to really value the additional security, coverage, reliability and so on. We’re expecting 22,000 MPNs deployed by 2030 so not insignificant.

Which other technologies are changing the game?

Edge computing, of all types from edge device to MEC, is clearly critical. The combination of that with AI means for a lot more automation of just about everything, particularly relevant to the IoT space which is our bread and butter. Throw in 5G and you have a combination of factors that will have a significant impact on how solutions are architected. There’s more intelligence and it needs to reside closer to the application. All of that combined is a bit of a game-changer.

What are you looking forward to at Total Telecom Congress next month?

I want to hear about how the roles in the ecosystem are changing. We have a hypothesis that with the evolution of cloud/edge, increased focus from telcos on IT services, the further separation of control layers from network infrastructure, virtualisation, open networks and a few other macro trends, that the old roles of organisations will change and that we need a new taxonomy for the organisations in the space. I’m looking for input on that.

Total Telecom Congress will be held on 1st and 2nd November at London’s Business Design Centre. The event will bring together over 1000 senior leaders from the global telecoms industry to discuss the key strategic priorities for telcos around the world. To join us in London next month, head to the event website to book your ticket.