Telecoms trends for 2024
2024 will see key developments in generative AI, eSIMs and OpenRAN, says Peter Jarich, Head of GSMA Intelligence.
With 5G connections growing from 1.6 billion to 2.1 billion through 2024, 5G monetisation will become an ever more important focus for the telecoms industry.
It took 4G nine years to reach 1.5 billion connections, whereas 5G has achieved this in just five years. As adoption continues to grow, so will the imperative for the mobile industry to monetise their investments with telecoms operators intensifying their 5G B2C monetisation efforts in 2024 says Jarich.
New types of 5G plans will be a crucial element of this push – for example, speed-based 5G tariffs and/or 5G tariffs linked to digital services. Research by the GSMA shows that, compared to 4G users, 5G users are more engaged with digital services and more interested in bundling them with connectivity – this will form part of operator calculations when crafting 5G offerings.
Operators will also increasingly look to use enhanced connectivity such as 5G and fibre to accelerate revenue growth in connectivity and digital services, further expanding their revenues beyond traditional core telecoms.
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AI on smartphones
From hardware to software and apps, advanced AI is set to play a growing role the evolution of smartphones in 2024, including large language model (LLM) processing on smartphones – an important step in AI’s consumer prospects. This will require advances in smartphone hardware, such as in chipsets. Qualcomm recently unveiled its new Snapdragon 8 Gen 3 mobile processor with chipmakers such as MediaTek set to follow.
In terms of smartphone operating systems (OS), advanced AI will, for example, help to hyper-personalise the user experience (e.g. generative AI wallpapers by Google), enhance the OS feature set (e.g. Google’s Best Take) and further evolve native digital assistants (e.g. MotoAI by Motorola). On the app side, advanced AI is expected to help introduce a plethora of new functionality in mobile apps across verticals, such as text-to-digital content generation. Existing mobile apps should also see advanced AI-enabled improvements in functionality, such as text-analysis apps.
Extended reality (XR)
Throughout 2023 there have been XR developments related to hardware, software, and applications. But overall, it still remains a niche technology says Jarich
Apple’s entry into XR with the commercial release of its Vision Pro headset in 2024 should help drive momentum, by spurring the expansion of XR content libraries beyond gaming. Current XR leaders will also likely push harder on content, as evidenced by Meta’s new partnerships with Roblox and Xtadium for its recently launched Meta Quest 3 headset. Steady metaverse developments, such as the recent 5G-enabled holographic meeting trial by 5G Future Forum members, should also support momentum for XR.
eSIM adoption
The launch of eSIM-only iPhones in the US in September 2022 accelerated eSIM deployments and commercial launches globally, with more eSIM device and service launches in the first half of 2023 than in any previous period.
On the eSIM front, there will be three important things to watch in 2024. First, is progress with consumer adoption. Now that eSIM technology is widely available in flagship smartphones and the service is available in more than half of the world’s countries, turning availability into customer adoption will be key.
Second is the transition to eSIM-only smartphones beyond the US, with eSIM vendors expecting Apple to make such a move in selected European countries in 2024.
The third is the push from MNOs (Mobile network operators) talking more about eSIM to their customers, especially in the context of digital-first or digital-only consumer propositions, targeting digital native and tech-savvy customers.
Cloud gaming
Momentum for digital gaming is accelerating, with adoption of cloud gaming subscriptions on the rise. We expect even greater momentum in 2024.
New cloud gaming service launches are one driver. Netflix looks set to launch its cloud gaming service (currently in beta testing in several markets), while Samsung has announced a Q1 2024 launch for its own service. Further, Ubisoft bagging the cloud streaming rights for Activision Blizzard titles will increase cloud gaming service competition. Cloud gaming’s growth should be further supported by the increase in partnerships among ecosystem players.
5G next: standalone, 5G-Advanced and 6G
In 2021, 44% of operators said that they planned to deploy 5G standalone (5G SA) within two years. Fast forward to 2023 and, while progress on 5G SA has been gaining momentum, the prediction did not come to pass.
Operators are now expressing similarly optimistic views on the deployment timing for 5G-Advanced. More than half expect deployment of 5G-Advanced a year after standards are released. Against this backdrop, 2024 will see operators juggle the prioritisation of 5G SA versus 5G-Advanced, with suppliers playing their part to kickstart a new round of 5G investment.
This will all take place as 6G standards and technology visions come into view, making strategic prioritisation – and vendor messaging – even more important.
Network APIs
Based on work from hyperscalers and network infrastructure suppliers, GSMA Intelligence predicted network API exposure would be a theme for 2023. With operators representing almost two thirds of global mobile connections signed up to the GSMA’s Open Gateway initiative less than a year after launch, this prediction was accurate.
In 2024, much is at stake; 5G monetisation remains a top priority for telecoms operators, and network API exposure is seen as key to driving 5G network return on investment. 2024 will bring more operator commitments and further market launches. However, with 80% of operators claiming to have exposed network APIs on a commercial basis, concrete examples of how federation and agreement on common APIs can drive success will be key to drive usage.
Cloud and edge productivity
Telco-cloud partnerships used to be headline news, marking a shift from how operators traditionally built and operated networks. Such partnerships are now commonplace, and telcos have come to accept cloud – including edge cloud – as an integral part of their network strategies. This focus will not go away in 2024.
However, the acceptance of cloud’s value should lead to productive discussions about the best way to use it, including edge versus core use cases, extensions to edge devices and multi-cloud orchestration.
Generative AI
With generative AI making headlines for most of 2023, it is easy to forget that ChatGPT was only launched in November 2022. For most users, including operators, generative AI is still a new phenomenon. Most of 2023 was spent getting up to speed on the topic, including potential use cases, technical requirements, supplier capabilities and easy wins. This learning process will extend into 2024, driven by a need for operators to move beyond internal use cases (66% see network troubleshooting as the top application) and for suppliers to prove out their solutions (technology maturity was the top deployment obstacle among operators).
Open RAN
The last few months of 2023 saw a handful of high-profile open RAN (Radio Access Network) endorsements. Ericsson announced its support for the technology while tier-one operators announced new open RAN supply contracts: Verizon (Samsung and Ericsson), AT&T (Ericsson) and NTT (Nokia).
While telecoms operators in Europe and Asia have been active for some time, momentum with North American operators and network infrastructure incumbents should be a breakthrough for the technology, reflecting the fact that open networking technologies are the No.2 network investment priority for operators in 2024 and into 2025.
GSMA Intelligence’s “2024 Research Themes: topics shaping the industry and driving our focus”, can be downloaded here.
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