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In the next five years, the AT&Ts, T-Mobiles, and Verizons of the world might not be primarily competing against each other, according to a new survey from EY that tracks executive sentiment.
In a first look at survey results shared with Tech Brew, EY reported that 55% of respondents cited “disruptive competition” as a key barrier to profitability and growth in the near future.
While the usual suspects—big telecom companies and mobile virtual network operators (MVNOs) that rent their infrastructure—“loom large as perceived competitors,” responses from more than 60 C-suite executives across more than 50 telecom operators indicate that “hyper-scalers are seen as the dominant threat five years out, with satellite companies overtaking virtual mobile players,” according to an EY summary.
That’s borne out in the real world: As Tech Brew reported, Comcast Business recently announced a partnership with Starlink to fill network gaps in rural or otherwise underserved areas. The SpaceX subsidiary is also becoming a leading option for broadband across the cruise industry.
Adrian Baschnonga, EY’s lead analyst for global technology, media and entertainment, and telecommunications, said the survey revealed a gap between what telecoms see as their fiercest competitors now—each other—and what their primary competition will be in a few years.
“Telco executives are looking at a broader landscape, one that doesn’t involve just like-for-like rivals, but rivals with different forms of connectivity, rivals from the technology space,” he told us.
That doesn’t mean these companies will stop working together, even if they become increasingly wary of each other’s earning potential, Baschnonga said.
“There are a lot of partnerships between satcos and telcos; it’s necessitated by serving remote location use cases, by bridging the digital divide,” he said. “But at the same time, there is that slight fear of disruption. I think ‘frenemy’ or ‘coopetition’ is the best way to sort of describe that ambivalence.”
Overall, Baschnonga said, the survey forecasts a rapidly shifting telecom landscape.
“The industry in five years’ time could look quite different, according to executive sentiment,” he said. “The question then becomes, what are telcos doing now to prepare?”