SummitX 2024: iQmetrix Telecom Industry Address — Top 5 Megatrends

Each year, the iconic iQmetrix Telecom Industry Address offers a host of insights into current industry megatrends and what the company is doing to tackle the needs of this relentlessly changing industry.

And this year, our team of iQmetrix leaders were honored to deliver the address in person, to a warm and engaged audience, at the incredible SummitX in Scottsdale, Arizona!

For those who missed it, here’s a brief recap of the top five megatrends affecting the North American telecom retail industry in 2024, as identified by our researchers and experts, in no particular order.

AI Transforming the Telecom Industry

Consumers are now aware of Generative AI, and it is beginning to make its presence felt in every facet of the telecom industry. 

Smartphones are becoming AI powered personal assistants, joining multiple apps behind the scenes to create seamless user experiences. Think of asking your AI assistant to organize and book a dinner meeting: it can use your various apps to find and reserve the restaurant, send calendar invites to your contacts, give you directions or order you a ride, help you rate the restaurant after dinner, and email a follow-up message to attendees the next day. 

AI is also helping device users optimize phone use, from improving photography with device cameras, to helping save on battery consumption.

At a higher level, GenAI is being used by telcos in network management, customer service, sales processes, and customer personalization.

In-Store Remains Consumers’ Preferred Shopping Channel

It’s clear that, although the pandemic did changing consumer behavior, brick-and-mortar retail is not dead — especially when it comes to wireless retail.

While only 40% of consumers across retail in general now prefer to shop in-store, according to the GSMA, that number jumps to 50% when it comes to wireless consumers. And 47% of wireless consumers say they will go to their mobile operator brand for their next device (whether corporate or authorized retailer store), vs OEMs (29%) or other retailers (13%).

Even across retail in general, when it comes to purchases they need extra service on, or want to see and touch before they buy — such as phones — consumers still value the in-store experience. 

Device and Accessory Sales Trends

After a period of decline caused by longer buying cycles, it’s now a mixed bag when it comes to device and accessory sales trends. And for the first time, iQmetrix is delving into its own internal data taken across a selection of operators to see how the numbers stack up.

According to the IDC, the global smartphone market grew by 6.5% year over year in Q2 of this year. Across the U.S., Counterpoint says that smartphone sales were up 5% year over year in July 2024. However, device sell-through is still down 36% versus its peak in 2017. 

These external figures indicate that while there is still a way to go before the market is recovered, there is light at the end of the tunnel. So how do iQmetrix’s figures compare?

These also show there is cause for optimism. Among our best operators, whose sales figures are combined, our numbers show that:

• The average smartphone replacement cycle is now 2.7 years, and
• Smartphone sales in terms of units are essentially flat (-0.02%) in H1 2024 year over year, but
• Smartphone sales in terms of revenues are up by 3.76% in H1 2024, year over year.

So why has the revenue increased, if unit sales are flat? Our data shows that:

• The average price per smartphone has increased by 22% since 2021 — from $693.79 to $873.42 USD. 
• What’s more, accessory spend per smartphone has also been increasing gradually over the past three years.

Connected Devices Propelling Growth

In the 2023 iQmetrix Trends in Telecom Retail Survey, respondents were asked, ​“Where do you expect sales of smart home devices (smart TVs, IoT-connected devices, etc) will be three years from now?” An overwhelming majority (78%) said smart home devices sales will increase. 

They were not wrong. Today, eSIM is driving growth in licensed IoT through reduced deployment cost and growth in consumer-facing applications. 

Some carriers are leaning into the growth being driven by IoT — which, for example, now makes up more than half of AT&T’s total subscriber base.

One interesting tidbit? Smartwatches, home security systems, and connected cars are often the first IoT devices to come to mind, but it doesn’t end there. Smart dog collars accounted for the largest share (43.8%) of the US pet wearable market in 2023. 

As for future growth, the sky is the limit. Counterpoint has done some research for global IoT connections, and is predicting 43% growth for IoT eSIM connections between 2023 and 2030.

GSMA has similar predictions:

• 3.5 billion: number of licensed cellular IoT connections globally in 2023, versus
• 5.8 billion: GSMA’s prediction for global licensed cellular IoT connections by 2030

Customer Segmentation and Personalization

Our final megatrend zoomed in on the hugely increased focus seen over the past year when it comes to customer segmentation, and personalization. 

Both US and Canadian operators are laser-focused on customer segmentation as a tactic to increase revenues by concentrating on underserved or under-performing areas.

• One in two households in underserved Canadian communities don’t meet the basic service target for Internet speeds
• Verizon is aggressively targeting the prepaid market segment with Total Wireless
• And let’s not forget the B2B segment, which is the main driver of revenue growth for mobile operators in the US

When it comes to customer personalization, this is now expected by today’s consumer. In response, telecom retailers are investing heavily in leveraging advanced data analytics, AI, and machine learning to deliver personalized experiences. For example:

• Rogers used AI to analyze customer data and provide tailored offerings, contributing to 27% service revenue increase in 2023.
• Verizon’s ​“Segment of Me” includes personalized offers, plans, product recommendations, and service upgrades, resulting in lower churn rates.
• TELUS is analyzing call center data with AI, and using it to predict customer issues and provide tailored solutions.

iQmetrix is also leaning into AI tools for customer lifecycle management, and announced its upcoming Customer Lifecycle Management suite of solutions at the Industry Address. Full blog post on this topic to come!

Check out the full Industry Address presentation on video, below (Top 5 Megatrends section with graphs and commentary is from timestamp 12:15 to 23:35). Follow this blog for more insights from the 2024 Telecom Industry Address and many other SummitX sessions.