Telecommunication Market Trends

Growth Drivers

• Growing popularity of internet buying - The e-commerce platforms such as Alibaba, Amazon, and eBay, have been the direct beneficiaries of internet-induced demand shifts among consumers. Furthermore, the establishment of fulfillment centers has adversely affected the local retailers.
  
  For instance, as per a 2022 National Bureau of Economic Research study, the sales in a traditional brick-and-mortar retail store fall by 4.0% every year after a local fulfillment center opens up. The growing penetration of e-commerce platforms is aiding to the growth of Internet Telephony Systems (ITSs).
• Development in 6G infrastructure - The need for 6G networks has grown as a result of the development of new applications such as extended reality and distributed sensing, among others. Furthermore, the growing number of smart city initiatives and the need for driverless cars necessitate dependable network access, which the 6G rollout can enable.
  
  By 2026, smart cities are predicted to produce a significant economic boost of about USD 20 trillion. Therefore, it is anticipated that the market players in the telecommunication market will have plenty of growth prospects in the future due to the quick advancements in 6G technology.
• The COVID-19 pandemic's ongoing contactless diagnosis is driving more demand for telemedicine services - The COVID-19 pandemic's effects have accelerated the global market's expansion. The affected patients were needed to exercise social distancing which eventually mandated remote diagnostics. Telemedicine technology has emerged as a result of these considerations, lowering the risk of acquired infections through physical contact.
  
  The use of voice and video conferencing has revolutionized healthcare services and made them more readily available in an emergency. According to the 2024 National Electronic Health Records Survey, the telemedicine adoption rate increased from 5.4% in 2019 to 86.5% in 2021. The onset of the pandemic provided an impetus to telemedicine in remote healthcare, thereby driving market growth.

Challenges

• High cost - The telecommunication market growth is hindered by the high installation and resource training costs. Significant investment is required in order to train people and build infrastructure. Additionally, the cost of the raw materials used by the telecom sector has grown significantly over time, increasing the need for high capital. This in turn limits the market's ability to grow.
• Licensing concerns - There are a number of technologies for which the government does not provide licenses due to their negative environmental effects.  For example; authorities of several nations have strict regulations for licensing high-power radio frequency transmitters because they can interfere with wildlife navigation and also have other environmental impacts.
  
  Further, there is significant amount charged as license fee. For instance; in India, telecom operators are required to pay the Department of Telecom (DoT) license fees and spectrum usage costs, which amount to roughly 3-5% and 8% of the Adjusted Gross Revenue (AGR), respectively.  Under the new policy, telecom operators are required to pay a one-time entry fee as well as a variable license cost that is based on a percentage of their annual gross revenue (or "AGR"). Overall, non-licensing difficulties also partially impede market expansion.