Deloitte: Top 5 telecoms trends for 2016

Deloitte analysts/Deloitte
26 Jan 2016

Analysts from Deloitte Global outline the five key trends that will manifest over the next 12-18 months for companies in the telecoms industry.

1. Used smartphones: the $17 billion market you may never have heard of

In 2016 consumers will sell outright or trade-in approximately 120 million used smartphones generating more than $17 billion for their owners, at an average value of $140 per device. This is a marked increase from the 80 million smartphones traded in 2015 with a value of $11 billion, or an average value of $135.

The value of sold or traded-in smartphones will likely be about twice that of wearables and 25 times the value of the virtual reality (VR) hardware market.

Worth $17 billion in 2016, and with 50% year-on-year growth in units, the used smartphone market is forecast to grow four-five times faster than the overall smartphone market. A total of 1.6 billion smartphones are expected be sold in 2016, an 11% increase on the prior year. Used smartphones represent an increasing share of the market: about 7% of the total smartphone sales by units in 2016, up from 5% in 2015 and 4% in 2014.

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2. VoLTE / VoWiFi — capacity, reach, and capability

About 100 carriers worldwide will be offering at least one packet-based voice service at the end of 2016, double the amount year-on-year, and six times higher than at the beginning of 2015. We estimate that approximately 300 million customers will be using Voice over WiFi (VoWiFi) and / or Voice over LTE (VoLTE); double the number at the start of the year and five times higher than at the beginning of 2015.

For most carriers launching VoLTE or VoWiFi in 2016, the primary motivation is likely to be to increase network capacity and extend the reach of their voice services. While VoLTE or VoWiFi technologies enable a range of value-added services, such as video calling, we expect the majority of carriers to exploit this additional functionality in later years, with the initial focus being on coverage and capacity.

VoLTE increases capacity as it allows operators to move voice calls off 2G and 3G networks and onto the LTE (4G) network. The often lower frequency spectrum that is freed up can be reused for data services. Additionally the LTE interface is more efficient at carrying calls relative to traditional calls: it can support up to twice as many voice users in a given bandwidth (per megahertz). Additional cost savings can be obtained from retiring legacy infrastructure, and not having to run two infrastructures in parallel, one for data and one for voice.

VoLTE also offers a range of enhancements over standard voice. For example it offers the ability to use a data connection while being on a call, superior voice call quality, faster call connection, fewer dropped calls and the ability to switch from a voice call to a video call. However while early adopters in 2016 are likely to be most fervent users of this additional functionality, many users may not notice the variation in voice quality.

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