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Governments have passed over $30T in stimulus since the pandemic began, of which about $3T is earmarked for ICT

1Q22 5G Telecom Market Landscape infographic

Key Insights

Government funding will incentivize communication service providers to pull forward and broaden the scope of their 5G deployments, causing demand for 5G infrastructure to reach critical mass by the middle of this decade. ​

Of the $3 trillion earmarked for ICT, TBR estimates approximately $800 billion, or nearly 27%, will be allocated for connectivity infrastructure, of which 5G is a major component. ​

Money is targeted at key areas of strategic importance, such as quantum computing, semiconductors, 5G, broadband infrastructure, edge computing, AI, IoT and other ICT-related domains. ​

Related content:

Webinar: 2022 Predictions: Telecom

Special report: Top 3 Predictions for Telecom in 2022

Telecom infrastructure services: 2Q21 insights from TBR’s Telecom team

5G and geopolitics take center stage in the development of the TIS market

Unprecedented government support will boost the ICT sector over at least the next five years, with the telecom industry poised to be one of the key beneficiaries of the stimulus. Western-aligned governments will also increasingly mandate and provide support for CSPs to swap out gear from Huawei and ZTE, and these projects could take several years to complete.

Join Telecom Senior Analyst Michael Soper for a webinar examining TBR’s Telecom Infrastructure Services (TIS) Global Market Forecast for 2020-2025, including the expected impact of these events on the market.

Don’t miss:

  • Key growth drivers and growth detractors in the TIS market from 2021-2025
  • How government spend and geopolitics will influence the TIS market
  • Which vendors are well-positioned to capitalize on trends in the TIS market

Register today to reserve your space

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

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Government investments worldwide will help accelerate 5G deployments as societies adapt to new normal

Key insights

An increasing number of governments worldwide are becoming directly and/or indirectly involved in ensuring new technologies, such as 5G, are widely deployed in their respective countries.

TBR’s research indicates governments worldwide will invest more than $2 trillion in the ICT sector over the next five years, starting in earnest in 2021. Of that $2 trillion, several hundred billion dollars will flow directly into the 5G market.

The pandemic has accelerated enterprise interest in adopting new technologies such as 5G as a part of their digital transformations, aligning with social distancing mandates and supporting remote work environments.

The 5G Telecom Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

COVID-19 pandemic forces telecom industry to go all in on digital transformation

CSPs face brave new world; government stimulate market

The COVID-19 pandemic is expected to persist through at least 2021 as vaccines and other virus mitigation efforts take time to make their way through societies globally. In the meantime, the global economy remains in a state of suspended animation following unprecedented injections of fiscal and monetary stimulus by governments across numerous countries, which total over $20 trillion (or 23% of global GDP in 2019). The amount of stimulus is expected to continue growing steadily through 2021 and potentially beyond as governments aim to fully offset the impact of the pandemic on their economies as well as build a foundation for sustainable economic growth.

After weathering the first phase of the pandemic in 2020 relatively well, communication service providers (CSPs) will enter 2021 facing a brave new world and many tough decisions. The unrelenting virus is forcing economies and societies to fully embrace digital transformation as they adjust to the new normal, and it is forcing CSPs worldwide to take a hard, holistic look at their operational, business and growth models, and to adjust and accelerate their digital transformation road maps accordingly.

Fortunately for the telecom industry, a significant and growing portion of government stimulus is being earmarked to enable the ICT sector to accelerate infrastructure and ecosystem development. CSPs and their suppliers will be key beneficiaries of the trillions of dollars and other support mechanisms (e.g., tax breaks, low or no interest rate financing) governments will directly and indirectly inject into the ICT sector and broader economy for these purposes. This stimulus will help CSPs ease their capex and opex burdens as they migrate to the new network architecture and will ensure they have the capital necessary to keep their businesses going and their debt obligations satisfied.

2021 telecom predictions

  • Government stimulus powers ICT investment
  • Governments will increasingly democratize spectrum to ensure a vibrant 5G ecosystem
  • CSPs accelerate 5G SA road maps

Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.

5G is coming faster than originally expected

Competitive and government pressures have been building for communication service providers (CSPs) in key countries and regions, especially over the past six months, to implement 5G faster and more widely across geographies than original timelines suggested. COVID-19 is one of the few key catalysts of this push.

Join Principal Analyst Chris Antlitz Aug. 26 for an in-depth, exclusive review of TBR’s most recent 5G Telecom Market Landscape and 5G Telecom Market Forecast where he will discuss the impact of key market occurrences over the past six months on the 5G market and the broader ICT ecosystem.

TBR’s 5G Telecom Market Landscape, includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities. Our 5G Telecom Market Forecast details 5G trends among the most influential market players, including both suppliers and operators. This research includes current-year market sizing and a five-year forecast by multiple 5G market segments and by geography, including the Americas, EMEA and APAC, as well as examines growth drivers, top trends and leading market players.

Don’t miss:

  • Why CSPs are accelerating 5G investments
  • Which countries are driving the bulk of 5G investment
  • How COVID-19 is impacting the 5G market

IBM Z’s relevance will persist in the digital world

Software abstraction converges ICT onto single platforms

Software-defined networking essentially virtualizes the last leg of the three-cornered compute, storage and networking stool. Similarly, the software abstraction makes compute and networking mere workloads on the compute instance. Vodafone’s (Nasdaq: VOD) customer case study at Think 2020 addressed this integrated data and networking construct being delivered from one cloud computing architecture. New terms are now being coined to talk about the various compute form factors rapidly coming into view. Edge computing, edge cloud and fog computing all seek to describe new compute instances being deployed closer to humans and connected machines that will drive economic and social activity in the digital age. A single cabinet Z, therefore, can become the converged ICT install at the department and branch level. Carry out several more form factor reductions, and the concept of Z at the edge does not seem so far-fetched or beyond the realm of IBM (NYSE: IBM) engineering to achieve.

Form factor miniaturization comes to the Z; is Z at the edge on the horizon?

Most people unfamiliar with Z view it as a “behind the glass” monolith in need of air-cooled rooms and water-cooled architectures. Z now comes in standard 19-inch rack cabinets, with the first air-cooled model introduced this year at Think 2020. IBM aims this form factor at SMBs and startups, each of which represents new markets for Z. This design enhancement is the latest of many innovations IBM has brought to the Z architecture in recent product cycles.

Chapter 2 of the cloud, as IBM defines it, will be the unlocking of enterprise data for distribution throughout a hybrid multicloud world. Distributed, ubiquitous computing might flip the axis on the business considerations and technology applications for risk mitigation as the frictionless movement of data among and between enterprises becomes the norm, but it does not signify the death knell of the mainframe. If anything, this new computing architecture requires a virtual custodian and traffic cop for data security and for dynamic identity access and management. Recent design enhancements to the venerable Z architecture, coupled with bringing the Red Hat developer community to Z, have the potential to defend and extend Z’s market relevance far into the future.

Egypt and IT and the center of the world

What makes Egypt attractive

Egypt’s growing IT services and technology sector has been built on important natural advantages and few forward-looking investments in recent years. The country’s proximity to Europe, considerably large and educated talent pool, and relatively low costs compared to nearshore locations such as Poland, Romania and Bulgaria make Egypt a natural hub for IT services, just as it has been a hub for commerce for millenniums. In addition, multinational companies have long-established histories of doing business in Egypt, building up the trust and goodwill needed for large investments and sustained operations. IBM has had a presence in the country for 66 years, and in addition to its six regional delivery centers in Cairo, in 2019 it opened two new centers — an Innovation and Industry Client Center and a Marketing Services Center — to accelerate digital transformation for public and private sector clients through next-generation solutions such as AI, cybersecurity, digital technology, blockchain and hybrid cloud. Sharing a time zone with much of Europe provides Egypt with a natural advantage, particularly relative to India and the Philippines, two outsourcing megacenters. 

Atop these advantages and potentially separating Egypt from other growing outsourcing locations has been active investment by the Egyptian government in developing a business ecosystem, creating jobs and exports, fostering entrepreneurship, encouraging foreign direct investment, and assisting Egyptians in innovation efforts. While this mandate may sound ambitious, Egypt, a country known for large projects, has kept a tight focus on successful development of IT services and technology exports.

Sustained investment in talent

Egypt’s critical advantage could be its talent base, particularly due to the group’s size, technology skills and fluency in multiple languages. According to the Central Agency for Public Mobilization and Statistics in Egypt, approximately 500,000 students graduate from universities in Egypt every year, of which around 90,000 speak English. To assist graduates in finding employment with multinational companies — and to help those companies develop their employees’ skills — the Egyptian government, through ITIDA, partners with companies to provide mentoring, tools and competitions for startups as well as sponsor various hackathons and other initiatives.

The Egyptian IT sector exported around $4.2 billion in services in 2019, according to the Egyptian Information Technology Industry Development Agency (ITIDA). The country’s IT sector has become a substantial part of the overall economy growth, contributing both jobs and export revenues, primarily from BPO, software, application development and maintenance, and technical support services. TBR sees advantages for Egypt in the post-coronavirus world.

COVID-19 earnings impact review: Early warnings

Early earnings indicators reveal ICT vendor ‘new normal’

The reality of COVID-19’s impact potential is clear. You do not have to be an analyst by trade to understand the pandemic will create new normals in our personal and professional lives, disrupting entire business sectors, including ICT, in the process. What remains unclear in many respects, however, is the quantification of that impact.

As of the publication of this report, approximately half of the vendors that TBR authors dedicated quarterly or semiannual reports on have released their 1Q20 earnings results. While earnings announcements and presentations are still rife with uncertainty, these releases, plus TBR’s ongoing vendor-centric financial modeling, provide some indicators of how to quantify the impacts yet to come.

Beginning with this report and continuing through this quarter’s earnings and benchmarking cycle, we will be aggregating some of our financial modeling data across our upcoming reports to assess the current state impact of COVID-19 on vendor performance and to predict next quarter and full-year outcomes.

TBR’s advice to vendors: Get predictive about benchmarking

These early results suggest the industry will be split on how to best set business performance expectations in the current environment but will increasingly err on the side of caution in terms of predicting the future. Stalwarts yet to release, such as Dell Technologies and Hewlett Packard Enterprise (NYSE: HPE), have already announced that they, too, will suspend financial guidance. Now more than ever, understanding the trajectory of the ICT vendor peer ecosystem and aligning on industry best practices to navigate the effects of COVID-19 is critical for ICT players. Building, maintaining and updating line-of-business financial models on competitors enables vendors to better benchmark performance, predict quarterly and annual outcomes, and deploy tactics to optimize performance. Vendors should look at the context of peers’ earnings announcements for clues — while many are “going dark” in terms of providing revenue guidance, rich discussions are occurring in earnings calls regarding resource utilization, portfolio management, sales and go-to-market alignment that can be tapped for vendor insight to infuse into practices

In addition to this report, we are writing and reporting in depth on the COVID-19 impact in a dedicated special report series, webinars and our regular published analysis as vendors release earnings. Our published content is regularly updated on TBR’s website and can also be accessed through our client portals.

Technology Business Research, Inc. announces 1Q20 webinar schedule

Technology Business Research, Inc. (TBR) announces the schedule for its 1Q20 webinar series. The quarter’s webinars include TBR’s research predictions for 2020.

Jan. 8            A decade in, cloud’s real work begins

Jan. 15         Hardware commoditization pushes vendors into new ventures        

Jan. 22         The end of ‘digital’

Feb. 5           IoT settles in for the long haul

Feb. 12         Leading CSPs and webscales implement new ICT architecture to fully capitalize on digital era

Feb. 26         The emerging and evolving landscape of enterprise edge computing

March 11     Are digital transformation buyers ready for AI?

March 18     Enterprise adoption of private cellular networks poses opportunities and threats for telecom industry

TBR webinars are held typically Wednesdays at 1 p.m. EST/EDT and include a 15-minute Q&A following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Separating the tricks from the treats in the emerging technology sector

An overview of ICT trends, business models and best practices

As TBR separates which emerging technologies are tricks from those that are business strategy and financial performance treats, we will also provide insights on how to be the house with the best candy in town.

Technology disruption and innovation are constants across all segments of the ICT industry, and the pace of change is always accelerating. Established vendors are racing to launch new business segments and portfolio offerings to capitalize on emerging trends, as well as jumping into markets they previously had avoided or not considered addressable. “Born digital” players are sprouting up across all markets and threatening to take the share of established players.

In this environment, there is more customer choice than ever before, and more confusion about which technology trends have translated into currently viable business models, offerings and customer solutions, and which trends are purely marketing talk, backed by slick PowerPoint collateral, that promise outcomes that will only be delivered to customers years in the future. It is critical that vendors help customers separate the talk from the reality, as well as articulate where they have business models and solutions capable of addressing tangible current customer needs.

Don’t miss:

  • TBR’s views on the current business model and financial realities of emerging technology trends such as IoT, digital transformation, edge computing, quantum computing and others
  • Best practices that leading vendors are utilizing in commercial model, portfolio and go-to-market execution to establish real business models around each of these trends
  • TBR’s recommendations for how vendors can best message business models and offerings tied to emerging technologies to customers

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].