A few days ago, I was at an international conference on the uses of the Mobile fifth generation and other trends in the telecommunication sector. During one of the discussion forums, a representative of an African country asked me about the cost of building the 5G network. With my previous knowledge of the conditions of this country and the level of per capita income in it, I asked him: but why do you want this complex and expensive technology? He said: so I can uplift The level of our services and increase my revenue immediately.
This incident simply illustrates the most important risks surrounding the telecommunications sector in general and telecommunications companies in particular in the world. The consumer expects that the 5G will solve all his daily problems, while workers in telecommunications companies expect that it will raise their profits immediately, and both parties are unfortunately wrong.
If we talk about the ten most important risks threatening the existence of telecom companies during the next fifteen years, the cost of licensing modern technologies paid to governments will be the first reason, as the third generation bubble is still stuck in our minds and we still remember the billions that European telecom companies paid in order to obtain this license. Its inability to make immediate profits from it has caused the collapse and bankruptcy of many of these companies. The same story is being repeated now in the field of obtaining a Mobile fifth and sixth generation license in the future, as this license is very expensive and there is great doubt about the ability of telecommunications companies to take advantage of this advanced technology immediately and the availability of a complete ecosystem to raise their profits.
Then we add the second risk is the increase in the cost of building modern networks. According to the available studies, the cost of building a 5G network is equivalent to double or three times the cost of building a 4G network and the cost of building a complete Metavers world is 10 times the cost of building 5G network, and most of these networks are purchased in expensive foreign currencies.
The satellite networks will pose a danger within 10 years, especially in developing countries, which telecom service did not reach every place in it, or their services are intermittent.
The latest studies prove that the quality and speed of the Starlink service in Puerto Rico and Mexico was faster than their countries’ fixed broadband providers combined (74.80 Mbps and 45.50 Mbps, respectively)
The growing conflict between East and West is intensifying severely, which will harm the telecommunications operators in the future. Western countries are trying to stop the Chinese technical progress in the field of telecommunications by preventing them from working in Europe and north America, while Chinese companies respond with more penetration and lower prices everywhere else in the world, and political pressure is being exerted on a daily basis in order to prefer a particular product regardless of its efficiency or price, which will force telecommunications operators to take painful and unfavorable decisions.
It is said that data is the new oil, and with the knowledge that the majority of this information is produced, distributed and transmitted through telecommunication networks, the urgent question here is how much telecom companies have benefited from this data they transmit? The answer is frightening, as it is nothing compared to the rest of the specialized hyper scale international companies due to the large number of local laws that prevent telecommunications operators from analyzing and monetizing thisdata, while there are no such restrictions with the same force against international companies, and these hyper scale companies have huge technical capabilities in collecting and analysis of this data is not owned by telecom operators today.
It is known that these global companies have many social media applications today in order to push the final consumer to produce more traffic every minute, something that telecommunications companies cannot do without reducing the value of their services.
Digital transformation is one of the main risks that most of telecommunications operators are undergoing, but in their quest for this, some companies may lack a clear strategy or the driving spirit of such a transformation, and it will end up creating a distorted monster that cannot provide digital services at a time when everyone else do.
The e-sim is one of the most important future risks, which will greatly reduce the profits of telecommunications operators in the field of returns from national and international roaming. Many applications now allow you to use an e-sim card that you download on your mobile and provides you with large internet packages with attractive prices that prevent you from using your home SIM card while traveling or even within your country.
Sustainability, especially in the field of energy, is a slogan that has been raised by many governments and business sector, including telecommunications companies, most of which have committed to achieving zero carbon emissions by 2050. Taking into account the facts that this transformation toward “ green network” will cost a lot of money and these companies will eventually need to buy green bonds to meet its targets, which are financial bonds are expensive and their price increases every year as the year 2050 approaches.
Most of the operations of telecommunications companies in the future will be managed through artificial intelligence Software to save costs and raise quality. And because it is the best way to manage complex and complex telecommunications networks and provide the maximum number of services all the time and all days of the year. However, since most of the artificial intelligence programs will be owned by limited international companies, the entire world, not just telecommunications operators, will be at the mercy of these global companies and may enter the line of competition and demand a large part of the profit cake in the telecommunications sector
Shifting costs from CAPEX to OPEX, as telecom companies will pay more operational costs every year.
In return for depending more in the future on the artificial intelligence programs, and more Software and license, which are all capital costs currently and do not affect EBIDTA , while operating expenses will directly affect that and the company’s profitability directly.
