We're at a tipping point in terms of the network and IT vendors that shape the telecommunications technology industry.
That's the word from technology research and advisory firm, Ovum, as it sums up the trends seen at Mobile World Congress 2015.
Ovum says a number of companies that came into existence during the mobile industry boom between 1990 and 2005 are now seeing revenues flatline.
"The CEO of one BSS vendor told Ovum that he had had a number of meetings with other vendors that were interested in selling their business to him," Ovum says.
"The new industry players are grounded in software and offer their services via the cloud.
"Their core market is the enterprise business, but they see rich promise in the telecoms sector.
Ovum says telco capex has slowed dramatically over the last couple of years, with opex reduction a obsession for many. However, many of the new cloud service vendors believe the US$400 billion telco capex market 'is ripe for reduction'.
The analyst firm says several points stood out in this year's MWC, with one of the key points being 'surprisingly little focus' on services for the consumer market.
Cloud services, internet of things, enterprise mobility and ICT services more broadly, were the biggest service categories this year, Ovum says, with TV and mobile video 'largely conspicuous by their absence'.
Payments was arguably the most prominent consumer service category, Ovum says.
So what were Ovum's five key takeaways?
The focus of mobile operators – in terms of opportunities for growth – is shifting to the enterprise market
Ovum says two to three years ago telecoms operators started to talk about opportunities to expand into adjacent markets and to develop digital services.
"At the time they were thinking about both the consumer and enterprise markets. In 2015, however, the focus is very much the enterprise market – more specifically, cloud services and M2M/IoT.
"Operator strategies in the consumer market are now evolving toward B2B2C and partnership models.
Consolidation in the telecoms–technology sector is inevitable
"Many of the technology vendors whose business has largely involved enabling mobile operators to develop services and capabilities such as messaging, VAS and roaming are now desperately seeking new strategies and business models," Ovum says.
While some are trying to develop new lines of business by selling directly to the enterprise rather than via the operator, others are developing new service capabilities, such as around big data analytics.
But Ovum warns that these new markets are 'extremely competitive' and have traditionally offered lower margins than telecoms.
Operators' visions around virtualised networks are starting to crystallise
"A number of large operator groups, including AT-T, Telefonica and Deutsche Telekom, unveiled their technology and service visions for virtualising their networks at MWC 2015. "For many years now, European operator groups in particular have struggled to leverage their multi-market footprints in terms of cost or revenue benefits.
"They are seizing on network virtualisation as an opportunity to drive economies of scale and, wherever possible, to centralise platforms and technology," Ovum says.
"However, they remain vague about potential cost savings and how quickly they will be able to shut down existing legacy networks and functions.
5G is increasingly being seen as a network platform for IoT
Network vendors and operators are increasingly seeing 5G as a network for IoT. As such, the key requirements for 5G are starting to focus more on the ability to support (hundreds of millions of) connections and offer millisecond latency rather than pure speed.
The relationships between OTT players and operators are becoming stronger
"Over-the-top (OTT) players have come to understand that by partnering with operators they can significantly increase usage of their services," Ovum says.
They're now taking a proactive stance and reaching out to operators to try to persuade them to strike deals around zero-rated content and bundling.
Ovum says the bulk of this activity is in emerging markets, where OTT services tend to have lower usage levels, and where operators have strong brands and are trying to build a demand for data services.
"The preferred model for OTT players is to strike deals where no money changes hands and where both sides see benefits, although there are examples of operators demanding (and receiving) payment.
