What telcos need to know

Mobile World Congress (MWC)—the biggest event in the connectivity industry—wrapped up in Barcelona on Thursday. The show featured a barrage of innovative technology, including AI wearables, hyper-electric vehicles, and even robot dogs. But it also fostered meaningful conversations on crucial topics, including how telcos can seize growth opportunities and build resilience in an unpredictable market. “It’s one of the most intellectually stimulating events of the year, where you get to meet with all the leaders and shapers of the industry,” says McKinsey’s Jorge Amar. “I always come back energized.” With MWC in the rearview, check out these seven key insights shaping the future of the telecom industry, and listen in to a new episode of The McKinsey Podcast with McKinsey’s Ferry Grijpink to get his key takeaways from the event.

  1. Telcos could achieve significant impact with generative AI. The largest share of total impact will likely be in customer care and sales, which together would account for approximately 70 percent of total impact; network operations, IT, and support functions would round out the rest. To remain competitive and relevant in the coming years, companies must develop strategies now.

    Read: How generative AI could revitalize profitability for telcos

  2. Network APIs offer telcos a chance to generate sizable returns on their 5G investments. Over the next five to seven years, we estimate the network API market could unlock around $100 billion to $300 billion in connectivity- and edge-computing-related revenue for operators while generating an additional $10 billion to $30 billion from APIs themselves.

    Read: What it will take for telcos to unlock value from network APIs

  3. 6G will offer telcos the opportunity to revitalize the industry. If developed thoughtfully, it can attract sufficient cross-sector investment, drive innovation, grow adoption, and spark future waves of disruptive technologies—and it could drive new value on top of the connectivity layer. But to fully benefit from 6G, the industry must overcome legacy challenges. 

    Read: Shaping the future of 6G

  4. Cybersecurity is the most important tech need in 2024. It’s also the biggest driver of providers switching across product categories. If cyber offerings or expertise were still viewed as a nice-to-have by any providers, it is increasingly evident that they are now table stakes in the market.

    Read: Technology and telecommunications B2B customer buying trends: Bright horizons with some warning signs

  5. The fiber-to-the-home (FTTH) market offers significant growth potential. Some 40 percent of the world’s population remains without fiber access. The extent to which companies capture that potential, however, could hinge on their ability to improve returns on invested capital. Reducing costs wherever possible is crucial.

    Read: The keys to deploying fiber networks faster and cheaper

  6. Telecommunications is estimated to be responsible for up to 2 percent of global carbon emissions. Pressure is likely also to come from regulators around the world, as they begin to adopt their own decarbonization goals and factor sustainability considerations into their policies.

    Read: The growing imperative of energy optimization for telco networks

  7. Network customer experience (CX) is a growing priority. But current methods do not provide specific information about what part of the customer’s experience influences their perspective, how to link tactics to variations in CX, or how to associate satisfaction scores with business outcomes. AI can allow telcos to move from “macro” to “micro” analysis.

    Read: The network is the product: How AI can put telco customer experience in focus