5 ways technology, media and telecom will drive industry transformation in 2023

Darshan Naik is Chief Growth and Strategy Officer for Telecom, Media and Technology Markets Capgemini America.

2022 sets the stage for sea change in the technology, media and telecommunications (TMT) industry.

As we enter the new year, despite looming macroeconomic challenges, leaders in the space will continue to drive greater industry transformation by strengthening the rollout of 5G and the explosive growth of Metaverse in the commercial sector and the growth of value-added services .

The broader economic environment will lead to a focus on cost reduction in the first half of the year, but despite these economic challenges, the TMT industry will continue to push the boundaries of what is possible for consumers and drive growth in industries such as life sciences, automotive, retail and beyond.

I believe organizations will continue their current momentum in 2023, with a particular focus on time to value (TTV) – enabling intelligent growth through leveraging new technologies, connectivity and data ecosystems, ultimately improving customer experience (CX).

Here are my top five predictions for the technology trends that will gain attention in 2023.

1. Verticalization and the subscription economy will accelerate in high tech.

As the need for a more flexible consumer model expands, companies will continue to move to more subscription-based services and new business models. In the high-tech world, this is closely related to the concept of verticalization – as we see organizations start to expand their commodity business into more complex application ecosystems.

An example of what I would like to see in 2023 is the evolution of semiconductor companies into software companies focused on a “chip-to-cloud” strategy operating under a subscription-based model. The concept of this “special purpose chip” started when industry leaders started designing their own ARM-based chips for specialized use cases. This trend should continue as more industrial AI use cases emerge—each with its own unique needs for power, connectivity, and computing.

Additionally, traditional hardware companies will begin to shift their operating models to subscription models. Imagine buying a laptop on a pay-per-use subscription model for $25 per month. After a few months or a year, consumers can trade in that laptop for a new one—with the same subscription fee. This “computing as a service” will require bundling products to deliver customized products, such as personal computing or dedicated gaming devices.

In addition to semiconductor and hardware companies, hyperscalers are also increasingly focusing on industry-specific cloud for unique use cases, which is another trend we will see.

2. The company will continue to leverage 5G investments in telecom.

In recent years, telecom companies have invested heavily in the development of the infrastructure needed to roll out 5G.

Consumer price points have remained consistent despite the substantial increase in costs. The price of 5G isn’t reflected in monthly phone and internet bills, meaning telcos themselves are absorbing the multibillion-dollar investment. This has many organizations wondering how to monetize their 5G investments without putting consumers out of business.

5G monetization solutions will be a big area of ​​focus for the telecommunications industry in the coming year as rising interest rates lead to higher debt-servicing costs.

3. We will see telcos launching B2B sales and value-added services.

Another challenge for telecom companies is that most of their revenue comes from direct-to-consumer (DTC) sales.

We’ll start to see many of these organizations focus on business-to-business (B2B) sales — offering value-added services like smart products and consumer entertainment with 5G as the backbone. This pivot will drive the growth of the telco and unlock a whole new customer base based on added value.

A successful B2B strategy requires an end-to-end transformation in four main areas: product portfolio, commerce enablement, customer experience and business model.

4. Brands will continue to monetize and build the metaverse through the ecosystem.

The commercial and consumer hype surrounding the Metaverse will continue into the coming year, and more and more organizations are looking for ways to monetize its potential.

For example, by layering in augmented and virtual reality (AR and VR), media organizations will begin to develop ways to host the online personas and preferences of individual consumers in the digital world.

Developments like this will allow consumers to build a one-stop shop for their online profiles, which can range from social media to streaming to online gaming, and take personalization to new levels not possible until now.

To succeed in this vision—whether in the consumer metaverse, industrial metaverse, or business metaverse—industry leaders must come together to be more inclusive and embrace Web3 open technologies.

5. Personalization will be key.

Today’s consumers want more than lazy advertising — but many media organizations have yet to catch up.

Advertising is the largest single revenue expenditure on the Internet, second only to commerce. However, organizations that monetize advertising revenue have traditionally relied heavily on cookies and other stealth technologies, with little regard for privacy.

As privacy takes center stage and regulations increase, the fundamental model of ad tech is changing and new approaches are required to improve targeting and personalization. The shift away from linear TV ad spending will only accelerate if businesses in the industry pay more attention to content creation and ad licensing.

Instead of perpetuating the current climate of ad fatigue, the future of advertising will personalize profiles for each consumer and learn their likes and dislikes to build a recommendation engine for future purchases. However, to be successful, media companies must offer innovative ways to engage and collect data, with privacy at the core.

Innovation and transformation are the sparks that keep organizations burning.

While each of these trends is important to the industry, we cannot move forward unless we do so with climate impact in mind. The longevity and adoption of these technologies will depend on the ability of leaders to view sustainability as an investment, rather than simply viewing it as another cost of doing business.

The new year promises to be a promising one for consumers and businesses as organizations and leaders continue to push the envelope and develop new and exciting platforms, products and services.

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