Transformation rumbles on the 2016 horizon

31 Dec 2015

With 2015 just about wrapped up, Asia’s telecoms players are already looking ahead to 2016 with vigor and enthusiasm. We know this because Telecom Asia has conducted its fifth annual Business Outlook Survey, in which we ask the region’s telecoms players to tell us their hopes, dreams and expectations for the next 12 months. And the results reflect more enthusiasm and optimism than fear and uncertainty.

According to this year’s survey - conducted online in October and November - most respondents are expecting healthy market growth and financial returns in 2016, driven primarily by sexy new services including cloud, video, digital content, and the Internet of Things.

They also told us that LTE is still the technology that matters the most, but that technologies related to cloud, big data, and OTT will also have a significant impact on their business.

On the business side, it’s onwards and upwards for revenues, profits, and capex/opex, and steady-as-she-goes for headcounts and wages. Network upgrades will also figure heavily in business plans for 2016.

Meanwhile, most telcos will direct their strategic focus on new markets and cost reduction as they continue to hunt for new revenue streams and deal with pressures from non-traditional competition while meeting customer expectations. And there’s also a noticeable and growing awareness that “digital transformation” is no longer a futuristic buzzword - it’s a strategic necessity that telcos should start planning for now.

An optimism supreme

Almost everyone’s excited about the future - at least for the next 12 months. We asked respondents how optimistic they were about the growth prospects of their specific telecom sector compared to this time last year: almost 40% said they were more optimistic than last year, with another 18% saying they were “very optimistic.”

Less than 20% expressed less optimism compared to their expectations for 2015 (including just 4% of respondents who said they weren’t optimistic in the slightest). Around 23% said their level of optimism isn’t appreciatively different to a year ago.

Meanwhile, optimism for financial growth if their own companies was slightly subdued, but followed the same basic pattern. Close to 39% of respondents are more optimistic about their financial prospects than they were a year ago, with an additional 17% feeling even more optimistic. Interestingly, the level of pessimism over financial growth is less than responses about sector growth - less than 13% are less optimistic compared to last year, and only 2% are expecting a rough 2016 in this category. Over 29% don’t expect their financial prospects in 2016 to be any better or worse than in 2015.

Cloud-driven growth

We asked which three business sectors will serve as key growth drivers for 2016. Our respondents told us 2016 is going to be all about cloud, mobile commerce and video.

Cloud services (including hosting, storage, and apps) received the most votes, with 57% of respondents selecting it as a prime growth area next year (see Figure 1).

Figure 1: What sectors of the business do you think will be the key drivers for growth?


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