Telecom: what is it?
Innovation makes the world go round and some industries are more exposed to this fact than others. Therefore, the Telecom sector is a clear example of a sector for which innovation is a matter of life or death. Changes happen as quickly as they do profoundly.
That’s why telecommunications is the foundation of a fast growing industry. According to Insight Research, revenues from telecom services worldwide increased from $2.2 trillion in 2015 to $2.4 trillion in 2019.
Due to the expressiveness that these technologies gain every day, it is important to be aware of everything that happens in this market.
After all, have you ever stopped to think how we would have faced the period of social isolation caused by the Covid-19 pandemic around the world without telecommunications?
What is Telecom?
Telecommunications, or Telecom, is the name of the system that allows the exchange of information over significant distances through electronic means and can refer to all types of voice, data and video transmission.
This is a broad term that includes an extensive range of information transmission technologies. Thus, Telecom can refer to telephones (wired and wireless), fiber optics, satellites, radio and television transmission, internet and even the old telegraphs.
Although traditional telephone calls are the technology most easily associated with this market, Telecom today can have much more to do with data transmission than with voice.
Therefore, text messages, e-mails, streaming videos and even high-speed internet access for data applications, such as broadband information services and interactive entertainment are broadcast over telecommunications networks.
The history of Telecom services – how have communication technologies emerged and evolved?
To understand telecommunications and what direction its future may take, it is necessary to have a brief history of how it all began.
The history of telecommunications draws a parallel to the history of human communication itself. Therefore, non-electronic methods like the smoke signals themselves or even the carrier pigeons can be inserted in this timeline.
This is because the central concept of telecommunications – long distance communication – has always been an interest of humanity.
In Homer’s Iliad, the author even describes how the ancient Greeks used fire and smoke to communicate with nearby neighborhoods. In Africa and Asia, drums marked the principle of long-distance auditory communication methods.
All these methods were based on coded communication, i.e. the sound of drums or smoke patterns needed to be decoded so that the message could be understood by the receiver.
But the real break occurred in 1451, with the advent of mass communication. Johann Gutenberg, a German, invented the printing press.
This technology introduced concepts that we associate with the Internet today: the communication of one for many, the ease of speech reproduction and the mobility of information.
The history of telecommunications is a story about evolution, and often, in other industries, the process was incremental.
In 1790, the French engineer Claude Chappe built the first optical communication system, and this medium became very popular until the advent of electricity changed the whole game.
Then, 50 years after Chappe’s invention, Samuel Morse and his colleagues created the telegraph, which transmitted electrical impulses. Soon, in mid-1857, the Morse Code and the telegraph wires spread across the United States and even into the ocean.
By this time, real-time communication had finally become a reality.
As a result, the telephone came into being in 1876; but it became a domestic device only in the 1940s. This event made telecommunications personal. Alexander Graham Bell’s invention finally transmitted the human voice!
The journey of modern telecommunications is traced not only by major milestones, but also by ideas that were ahead of their time. The first wireless call, for example, happened in 1880. However, this advance was not instantly popularized.
Finally, of the first 40,000 years, the last 30 years have been a fast start in the sector. From the Internet to smartphones, from smartwatches to e-mails, from text messages to video calls, we all know this latest chapter because we were part of it.
What may have escaped our eyes, however, is that telecommunications have already changed again: from human to machine communication. We live in a world where devices connected to the Internet are constantly communicating with each other. They are even often talking about us.
The constant revolution in the Telecom industry
Historically, Telecom services profited from selling voice communication per minute, then made network access possible through multi-channel communication (voice communication became free), and today they are content providers.
So, what’s next? What new technology will transform this business model?
In the Telecom sector, where the product life cycle is extremely short, innovation has become a necessity and not an option. Telecommunications companies need to develop cutting-edge technologies to sustain organization, systematization and efficiency.
They need to be highly responsive, and each potential technology should be evaluated, discussed and integrated as quickly as possible. In addition, the entire economy depends on creating a dynamic, competitive and innovative telecommunications infrastructure. In this context, standing still means retreating.
Therefore, there are great difficulties and challenges in this scenario. Even though telecommunications are constantly innovating and transforming the way we work and the products we offer, the main concern is how to stay one step ahead of competitors in a strident environment.
Innovation, therefore, challenges technological convergence and holds the keys to future business growth in this sector.
According to the study “The Paradox of Innovation in the Telecommunications Sector” conducted by IBM, 80% of Telecom decision makers recognize the importance of collaborating with a wide range of external partners, since 51% of the technologies they develop come from external sources.
Therefore, expanding the horizons of innovation and challenging the limits of collaboration means being open to technologies that can be acquired externally. To manage this technology mix with strategy, it is necessary to think globally and act quickly.
Most Telecom companies have already defined their strategy in this direction. As a result, they have become much more than just providers.
Devices are also following this trend, like Siri, the intelligent voice assistant. Siri was acquired by Apple in 2010 and integrated in iPhone 4S with 2 immediate benefits: the integration within 6 months and the fact that no other competing platform could develop the feature.
Due to the large number of initiatives, companies are having trouble managing these rich flows of ideas. External ideas are communicated to organizations in a very informal way by email, telephone and platforms.
Then, to evaluate the idea presented, there are several exchanges of e-mails and meetings that lead or not to a decision to develop the new technology. As there is no coordinated process, there is often redundancy and loss of relevant information. This process is inefficient and time consuming.
Every new technology represents a competitive advantage and innovation has become crucial in the telecommunications sector.
The adoption of open innovation (internal projects with external ideas and technologies) and the systematic acquisition of externally developed technologies is the main strategy that Telecom companies must have to be at the forefront of the industry.