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Never mind the supermarket's "every little helps", in telecoms it's now a case of " every bit counts."


via Flickr © West Midlands Police (CC BY-SA 2.0)

  • The dawn of the day of the Gigabit Internet.
  • Second-hand and used smartphone market to become a major industry sector in its own right.
  • Growth of photo-sharing will have major implications for networks, transmission, storage and security.
  • In developed markets traditional phone calls are going the way of the dodo as Internet-based messaging, voice and video services proliferate.

The advertising tagline for one of the UK's big supermarket chains is "every little helps" It's a dig at competitors and refers to reduced prices applied across a range of goods. However, for the global comms industry, as trends change and traffic continues to expand at close to unmanageable rates every bit will be vitally important.

A new report from Deloitte takes a refreshingly different tack to the usual and frequently trite 'end-of-the-old- year, start-of-the-new' predictions that are trotted-out annually by a variety of Mystic Megs and whatever their male equivalents might be called. I was going to suggest 'Hugo Runes' from the Robert Rankin novels but that won't do. Hugo provides his magical abilities to the world for free and the notion of 'free' is a largely foreign concept in many parts of the global comms industry.

What is interesting about Deloitte’s TMT Predictions 2016, (the 'Technology, Media and Telecommunications' series begun in 2000) is that they refer to sectors often ignored by other prognosticators and cover subjects as diverse as the used smartphone market and the effect photo-sharing is having on the server market.

Let's start with second-hand smartphones which is described in the new report as 'the US$17 billion market you have probably never heard of.' According to Deloitte's research, this year consumers around the world will either sell outright or trade-in some 120 million used smartphones, generating a market worth worth that impressive sum.

The second-hand smartphone market has been growing fast for several years now but until recently little empiric evidence-based research was available on the subject. In one of the more recent examples, another analyst company, Gartner, in a survey based on the behaviour of German and US smartphone subscribers, found that the 60 per cent of them that change or upgrade their their handsets on a regular basis do so because they perceive the need for additional functionality, although whether this perceived need is real or the result of marketing and advertising is far from clear. That trend pushes more and more very sophisticated but still really quite new smartphones onto the used devices market.

Consequently, the global market for used smartphones (whether refurbished or not) will be in the 150 million units to 160 million units range by 2017. The research also found that a mere seven per cent smartphones end up in official recycling programmes while 64 per cent get a second lease of life while 23 per cent are handed down to other users and 41 percent are traded-in or sold privately.

According to the Deloitte report, each smartphone recycled this year will have an average value of $140, up from the $135 achieved last year. Remember, that's the average price, there is also evidence to show that in several geographic markets many particularly desirable handset models retain 70 per cent of their original value a year after they were launched in other parts of the world.

Ed Marsden, partner and telecommunications lead at Deloitte, commented; “The second life of the smartphone is an increasingly important market in the mobile industry There is an innate consumer desire to upgrade in order to have the most personal and useful devices. Savvy teenagers may urge their parents to upgrade their handset in the hope that they would in turn benefit from an upgraded hand-me-down. The growth of the second-hand smartphone market presents huge opportunities for the sector.”

Traditional voice calling on the way out in developed markets as Internet-based services and apps take over

Another section of the new Deloitte research deals with the phenomenal rise in the popularity of photo-sharing. It estimates that an astonishing 2.5 TRILLION photos will be shared or stored online globally in 2016, that's a 15 percent rise on last year. About 75 per cent of this total will be shared, while the rest will be backed-up online.

Now, think about the network impact and implications that this 3.5 exabytes (i.e. 3.5 billion Gigabytes) will have in terms of transmission, storage and security. Paul Lee, partner and head of TMT research at Deloitte, says, “Over 90 per cent of these photos will be taken using a smartphone. Digital SLRs, compact cameras, tablets and laptops will collectively contribute the remainder.”

And then there's what is referred to as 'the rise of the data exclusive'. What this means, according to Deloitte, is that over the course of this year, 26 percent of smartphone users in developed markets will no longer make any traditional phone calls in a given week, but will communicate instead via a combination of messaging, voice and video services delivered over the internet.

The report also points up the dawn of the Gigabit Internet age. It calculates that the the number of Gigabit per second (Gbit/s) Internet connections will rise to 10 million by the end of 2016, a ten-fold increase on last year. Of them, some 70 per cent will be residential connections, an impressive statistic but still only a small proportion of the 250 million customers on networks capable of Gbit/s connections that will exist by the end of 2016.

Ed Marsden says, “Evolving usage patterns and increasing demand for greater bandwidth may accelerate the supply of gigabit internet further. Video streaming in 4K resolution will be a key driver for improved data connectivity speeds in the coming years. Looking further ahead, we estimate that there will be approximately 600 million Gigabit tariff subscribers by 2020.” Such demand is certain to have a massive effects on the ability of networks to provide the levels, speeds and qualities of service that will be required.

And last, but not least, this year will see the real emergence of Voice over WiFi (VoWiFi) and Voice over LTE (VoLTE). By the end of 2016, about 100 carriers worldwide will be offering at least one packet-based voice service, double the amount year-on-year and six times higher than at the beginning of 2015. Deloitte says some 300 million customers will be using VoWiFi and/or VoLTE by December 31 next, five times higher than at the beginning of 2015.

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