Deloitte predicts telecoms trends for 2016

The technology, media and telecommunications (TMT) practice at Deloitte, the business advisory firm, has today announced its predictions for the telecommunications sector in 2016. The news comes following the launch of Deloitte’s TMT Predictions 2016, now in its sixteenth year.

Used smartphones: the $17 billion market you may never have heard of
According to Deloitte consumers will sell outright or trade-in approximately 120 million used smartphones around the world in 2016. This will generate a market of more than $17 billion (£11.7 billion), at an average value of $140 (£96) per device. 2016 will also see a marked increase from the 80 million smartphones traded in 2015 with a value of $11 billion (£7.5 billion), or an average value of $135 (£93).

In the UK market, the average price of a used handset increased from $30 in 2007 to $165 in 2013*. Some models may retain 70 percent of their value nine months after launch**. Julian Rae, TMT partner at Deloitte in Cambridge, comments: “The second life of the smartphone is an increasingly important market in the mobile industry.

'“There is an innate consumer desire to upgrade in order to have the most personal and useful devices. Savvy teenagers may urge their parents to upgrade their handset in the hope that they would in turn benefit from an upgraded hand-me-down. The growth of the second-hand smartphone market presents huge opportunities for the sector.”

Photo sharing: trillions and rising
Deloitte estimates that 2.5 trillion photos will be shared or stored online globally in 2016, a 15 percent increase from last year. About three-quarters of this total will likely be shared, and the remainder backed-up online. The expected network impact of this will be about 3.5 exabytes (the equivalent of 3.5 billion Gigabytes), a 20 percent increase from 2015.

Paul Lee, partner and head of TMT research at Deloitte, comments: “Over 90 percent of these photos will be taken using a smartphone. Digital SLRs, compact cameras, tablets and laptops will collectively contribute the remainder.”

Other predictions include:

The rise of the data exclusive
According to Deloitte, in 2016, 26 percent of smartphone users in developed markets will not make any traditional phone calls in a given week, instead preferring to communicate using a combination of messaging, voice and video services delivered over the internet.

VoLTE / VoWiFi: capacity, reach and capability
2016 will see the emergence of Voice over WiFi (VoWiFi) and Voice over LTE (VoLTE). By the end of the year, about 100 carriers worldwide will be offering at least one packet-based voice service. This is double the amount year-on-year, and six times higher than at the beginning of 2015. Approximately 300 million customers will be using VoWiFi and / or VoLTE by the end of 2016, five times higher than at the beginning of 2015.

The dawn of the Gigabit Internet age: every bit counts
According to Deloitte, the number of Gigabit per second (Gbit/s) Internet connections will rise to 10 million by the end of 2016, a tenfold increase from 2015. Of these, about 70 percent will be residential connections. However, this is only a small proportion of the 250 million customers on networks capable of Gbit/s connections that will exist by the end of 2016.

Rae adds: “Evolving usage patterns and increasing demand for greater bandwidth may accelerate the supply of gigabit internet further. Video streaming in 4K resolution will be a key driver for improved data connectivity speeds in the coming years.

“Looking further ahead, we estimate that there will be approximately 600 million Gigabit tariff subscribers by 2020.”