Startups Blog

Disrupting a Legacy Industry – Startups vs. Telco’s

The telecommunications, or telco industry is one which is something of an immovable force. While startups persist in developing innovations across all manner of industries and spheres, telco appears relatively untouched. However, according to exciting upcoming trends, that no longer seems to be the case.

telcos startups

Why is Telco a ‘Legacy’ Industry?

Looking at some of the more innovative startups in the world today, it is perhaps rarer than you might think to see emerging brands working with a telco. The fact is telecoms advances mainly appear in waves. These are large but uncommon. When they do arise, they tend to make substantial global impacts.

For example, the world continues to talk about 5G. It is thought that $4.2 billion of revenue will sweep into 5G vendors by the end of 2020 alone. 5G represents a huge number of exciting opportunities for big businesses.

Therefore, while telco may be seen as something of an old guard, 5G offers just one route towards future innovation. For example, ventures are already beginning to upscale changes in telecare, online gaming, and more.

How Are Startups Disrupting Telco?

Beyond 5G, it is also clear that SMEs are looking to bring open-source software into telecommunications. Going back decades, telco’s have been reliant on expensive, almost immovable hardware and software. That is why startup ventures are thinking ever more about building telco standards through open source.

Open source software is hugely popular thanks to its adaptability. It has already helped to establish flexible, accessible services such as cloud computing and even the Android OS in the mainstream. Theoretically, a similar service could – and should – work with telco, too.

In fact, we’re already seeing some ventures blending open source with 5G. A great example is Rakuten Mobile. This Japanese telco innovator is quickly developing nodes to help broader systems and services access 5G. It is one of many emerging trends that suggest moving from hardware to software is likely to be cost-effective across the whole telco industry.

What’s more, demand for more efficient, innovative technology is likely to grow. Where from? Established networks and providers. For example, AT&T, in recent years, has begun pushing for increased automation.

How Will These Impact Innovators?

If anything, it is an exciting time to be a telco innovator. Through open source, businesses will be able to create attractive resources that big telco providers will seek to adopt amid the 5G revolution.

Therefore, it is hardly surprising that VCs continue to network with these innovators. They may use startup databases such as Fundz, for example, to make valuable connections with just funded companies ahead of their competition.

In the meantime, it’s clear that this is a fascinating time for telco. 5G continues to emerge, slowly, on the horizon for consumers. For big businesses, now is the time to adopt and adapt to innovations from those working with flexible code.

Could startups help to turn telco around in the next few years? Providing funding interest persists, there should be some considerable disruptions to come.