Abstract
Telecommunication operators, traditionally rich and laden with financial resources, have never left much room for investment within their sector. Thanks to the impact of regulation, competition and technology, this will no longer be true. Is this an evolution that can open new prospects for potential investors in telecom infrastructures? Is it a positive evolution for investors outside the telecom business? What forms will new opportunities take? To answer these questions, we will start in the second section by analyzing the evolution of the telecom market. It is growing fast, with more people all over the world who have more connected devices which are transmitting more data with higher peaks of network utilization for uses that are increasingly critical. But all this incredible potential creates a challenge to telecom infrastructure that cannot be solved inside the traditional industry framework. In the third section we will discuss how fixed mobile networks and their hybrid forms have evolved and will continue to evolve to match this rapidly changing market. The fourth section describes how companies like Google/Alphabet, Facebook, Microsoft and Amazon, whose business is tightly linked to the evolution of telecom infrastructures, are moving to influence and channel industry transformation. In the fifth section, the investment prospects for telecom operators are analyzed in detail, especially in Europe, where regulation is taking a new direction to speed up investments and demand, while some geopolitical issues are increasingly conditioning every player in this scenario. Finally, through an in-depth exploration of changes in fixed and mobile networks, we identify and evaluate the potential investing options in the industry.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
As quoted by Plato in Cratylus, 402a.
- 2.
An exabyte (EB) is 1018 bytes. All words ever spoken by human beings until 2002 (Klinkenborg 2003) could be stored in approximately 5 exabytes of data. An exabyte is formed by one thousand petabyte (PB) and one thousand exabytes (1000 EB) is equal to one zettabyte (ZB).
- 3.
A homespot is a wifi located at home that can offer connectivity to the public, being part of a network managed by an operator.
- 4.
A terabit (Tb) is 1012 bit. A terabit is formed by one thousand gigabits (Gb); one thousand terabits (1000 Tb) is equal to one petabit (1 Pb). Usually, download speed is measured in bits and multiples of bits per second (like terabit per second or Tbps), while data storage is measured in bytes and its multiples (like terabyte or TB); a byte is made up of 8 bits.
- 5.
In a network, the backhaul connection is the portion that includes the intermediate links between the core network, or backbone network, and the access networks (fixed or wireless).
- 6.
Latency in a network is the amount of time it takes to send information from one point to another. Latency is usually measured in milliseconds (ms). It could be measured one-way (the time from the source sending a packet to the destination receiving it) or round-trip (the one-way latency from source to destination plus the one-way latency from the destination back to the source). Round-trip latency is more often quoted because it can be measured from a single point.
- 7.
Bandwidth is the maximum transmission capacity of a network channel. Usually bandwidth is measured in bits per second (bps), kilobits per second (Kbps), megabits per second (Mbps) or gigabits per second (Gbps).
- 8.
When communicating over the Internet, data passes through several intermediate devices (like routers) rather than flowing directly over a single wire. Each such device is a network “hop” because it causes data to hop between network connections, creating delays. A hop count is considered a measure of distance in networks.
- 9.
An edge computing node is a solution for bringing storage and computing power closer to the location where it is needed. Edge nodes reduce the volume of data that must be moved, the consequent traffic, and the distance data must travel. That provides lower latency. reduce the number of network hops, and transmission costs too. An edge computing node can be used for SDN, NFV, IoT or any computational need that is requested from or through the network.
- 10.
Network slicing is a form of virtual network architecture using SDN and NFV. A single network connection is sliced into multiple virtual networks that can support different radio access networks, or different service types on the same radio access. Each virtual network (network slice) comprises an independent set of network functions created by software suitable for the requirements of the particular use case. Each will be optimized to provide the resources and network topology for the specific service and traffic that will use the slice. For example, a doctor can simultaneously perform an ultrasound, which requires low and constant latency with an average throughput, while downloading the patient's medical records, a task needing a high throughput but which is insensitive to high and varying latency.
- 11.
LoRa (Long Range) is a patented wireless data communication technology used in IoT applications. Operating in the unlicensed spectrum, LoRa is able to achieve an extremely long-range connectivity, more than 10 km using extremely low power. This technology competes with other low-power wide-area network (LPWAN) technologies like narrowband IoT (NB IoT), LTE Cat M1 and, in the future, 5G LPWA (Low-Power Wide-Area).
- 12.
MulteFire is a wireless technology that operates standalone in unlicensed and shared spectrum, based on LTE technology. MulteFire is designed to co-exist with wifi and other technologies operating in the same spectrum. It targets vertical markets including industrial IoT, enterprises, and various other vertical markets.
- 13.
WiMAX (Worldwide Interoperability for Microwave Access) is a family of wireless broadband communication standards based on the IEEE 802.16 set of standards, providing wireless communications on the licensed and unlicensed spectrum. It was initially designed to provide from 30 to 40 Mbps but with its latest updates can offer up to 1 Gbps for fixed stations.
- 14.
The title of this short video is “What Is The Cloud—By AT&T” and is available at https://www.youtube.com/watch?v=_a7hK6kWttE (last retrieved March 13, 2019).
- 15.
Free-space optical communication is a form of optical communication technology that uses light propagating in free space (that is, in the air, outer space, a vacuum, or something similar) to wirelessly transmit data for telecommunications or computer networking. This is an alternative to optical transmission using solids such as optical fiber cable, and is also a substitute for radio transmission.
- 16.
Broadband Europe, https://ec.europa.eu/digital-single-market/en/broadband-europe.
- 17.
Proposal for a Directive of the European Parliament and the Council establishing the European Electronic Communications Code: http://data.consilium.europa.eu/doc/document/ST-10692-2018-INIT/en/pdf
- 18.
European Commission (2016) http://europa.eu/rapid/press-release_IP-16-3008_en.htm
- 19.
ITU is the United Nations (UN) specialized agency for information and communication technologies. Founded in 1865, it is the oldest among all the 15 specialized agencies of UN. It is responsible for facilitating international connectivity in communications networks, allocating global radio spectrum and satellite orbits, and developing the technical standards that ensure networks and technologies seamlessly interconnect. The agency also strives to improve access to ICTs to underserved communities worldwide.
- 20.
FTTx is an abbreviation that stands for all the different combinations of infrastructures based on fiber: FTTH, FTTB, and so on.
- 21.
See for this Section also the study commissioned by Berec, the association of the European national regulatory agencies (DotEcon and Axon Partners 2018).
References
Abrardi, L., & Cambini, C. (2019). Ultra-fast broadband investment and adoption: A survey. Telecommunications Policy, 43(3), 183–198.
Accenture. (2017). Lead or lose—A vision for Europe’s digital future. Accenture.
Alizadeh, T. (2017). Political economy of telecommunication infrastructure: An investigation of the National Broadband Network early rollout and pork barrel politics in Australia. Telecommunications Policy, 41(4), 242–252.
Baumgartner, J. (2019, February 14). Google fiber: A timeline of the good, the bad & the ugly. Light Reading.
Bock, W. & Wilms, M. (2016). Building the gigabit society: An inclusive path toward its realization. BCG.
Bresnahan, T. F., & Trajtenberg, M. (1995). General purpose technologies ‘Engines of growth’? Journal of Econometrics, 65(1), 83–108.
Case, S. (2016). The third wave: An entrepreneur’s vision of the future. New York: Simon & Schuster.
Cisco. (2017). Cisco VNI Global IP Traffic Forecast, 2016–2021.
Cisco. (2018). Cisco VNI Global IP Traffic Forecast, 2017–2022.
Di Castelnuovo, M., & Biancardi, A. (2020). The future of energy infrastructures: Brace yourself for a bumpy ride! In S. Gatti & C. Chiarella (Eds.), Disruption in the infrastructure sector: Challenges and opportunities for developers, investors and asset managers. Heidelberg: Springer.
Donovan, J., & Prabhu, K. (2017). Building the network of the future : Getting smarter, faster, and more flexible with a software centric approach. Boca Raton: CRC, Taylor & Francis.
DotEcon and Axon Partners. (2018). Study on implications of 5G deployment on future business models, Berec.
Edquist, H., et al. (2018). How important are mobile broadband networks for the global economic development? Information Economics and Policy, 45, 16–29.
European Commission. (2016). Communication from the commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Connectivity for a Competitive Digital Single Market—Towards a European Gigabit Society, European Commission.
Gallagher, D. (2019, February 9). Google watching its cable bills. Wall Street Journal.
Gartner. (2019). Vendor revenue from the public cloud services IaaS market worldwide 2015-2018.
Gatti, S., & Chiarella, C. (2020). The future of infrastructure investing. In S. Gatti & C. Chiarella (Eds.), Disruption in the infrastructure sector: Challenges and opportunities for developers, investors and asset managers. Heidelberg: Springer.
Grijpink, F., et al. (2019). Cutting through the 5G hype: Survey shows telcos’ nuanced views. McKinsey.
GSMA. (2014). Green power for mobile, GSMA.
GSMA. (2019a). The mobile economy 2019, GSMA.
GSMA. (2019b, February 26). Modernise regulation to deliver Europe’s digital future calls GSMA. GSMA.
Harbor Research. (2018). The private LTE opportunity for industrial and commercial IoT, Harbour Research.
Harris, M. (2019, January 21). Facebook’s plans for space lasers revealed. IEEE Spectrum.
iDate. (2018). Annual Economic Report 2017. European Telecommunications Network Operators Association.
iDate. (2019). DigiWorld Yearbook 2019. iDate.
IDC. (2017). Share of IT infrastructure spending worldwide 2014-2021 by deployment type.
Intelligent Energy. (2012). The true cost of providing energy to telecom towers in India. White Paper.
IPlytics. (2019). Who is leading the 5G patent race? A patent landscape analysis on declared SEPs and standards contributions.
Kim. (2017). 5G Economics—The numbers. Techneconomy Blog. https://techneconomyblog.com/2017/07/07/5g-economics-the-numbers-appendix-x/. Last accessed 28 Apr 2019.
Klinkenborg, V. (2003, November 12). Trying to measure the amount of information that humans create. The New York Times.
Lee, E., & Chau, T. (2017, January 4). The geopolitics of 5G and IoT. Jefferies.
Lee, E., & Chau, T. (2019, January 4). 5G: The geopolitical game continues. Jefferies.
Le Maistre, R. (2014, September 24). Energy bill shocks orange into action. Light Reading.
Nash, K.H. (2017). Future of outsourcing—Outsourced tech. Raconteur.
Newman, P. (2018). Business insider intelligence. The EDGE Computing Report 2018.
Newman, P. (2019a). The Internet of Things 2019: How the IoT continues to transform business, homes, and cities through next-generation digital solutions. Business Insider Intelligence.
Newman, P. (2019b). Telecom and technology forecast book 2019. Business Insider Intelligence.
Oughton, E., et al. (2018). Towards 5G: Scenario-based assessment of the future supply and demand for mobile telecommunications infrastructure. Technological Forecasting & Social Change, 133, 141–155.
Patrick, M., Robilliard, M., Morris, D., Coles, S., & Challawala, A. (2018). European telecom services. Make up or break up. Barclays: Barclays Research.
Strumpf, D., & Cherney, M. (2018, September 12). Australia’s actions against Chinese firms ignite 5G security debate. Wall Street Journal.
TeleGeography. (2014). Skype traffic continues to thrive. TeleGeography.
TeleGeography. (2019). Global internet geography.
The Economist. (2019, March 23). The future of big tech: Why big tech should fear Europe. The Economist.
van der Meulen, R. (2018). What edge computing means for infrastructure and operations leaders. Gartner.
Venkateshwar, K., et al. (2019a, February 28). Understanding convergence. Barclays Research.
Venkateshwar, K., et al. (2019b, February 28). CBRS: The convergence band. Barclays Research.
Venzin, M., & Konert, E. (2020). The disruption of the infrastructure industry: How investment decisions in the infrastructure industry are expected to change and how to prepare. In S. Gatti & C. Chiarella (Eds.), Disruption in the infrastructure sector: Challenges and opportunities for developers, investors and asset managers. Heidelberg: Springer.
Weldon, M. K. (Ed.). (2016). The future X network: A Bell Labs perspective. Boca Raton, FL: CRC.
Zhong, R. (2018, March 7). China’s Huawei is at center of fight over 5G’s future. The New York Times.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Sacco, F.M. (2020). The Evolution of the Telecom Infrastructure Business. In: Gatti, S., Chiarella, C. (eds) Disruption in the Infrastructure Sector. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-44667-3_4
Download citation
DOI: https://doi.org/10.1007/978-3-030-44667-3_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-44666-6
Online ISBN: 978-3-030-44667-3
eBook Packages: Economics and FinanceEconomics and Finance (R0)