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Telecoms industry faces challenging conditions in 2023 amid market pressure and economic uncertainty

Telecoms industry faces challenging conditions in 2023 amid market pressure and economic uncertainty
PR Newswire
LONDON, Nov. 23, 2022

Analysys Mason releases its top predictions for the telecoms industry in the year ahead
LONDON, Nov. 23, 2022 /PR…

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Telecoms industry faces challenging conditions in 2023 amid market pressure and economic uncertainty

PR Newswire

Analysys Mason releases its top predictions for the telecoms industry in the year ahead

LONDON, Nov. 23, 2022 /PRNewswire/ --  Analysys Mason, a world-leading management consultancy focused on telecoms, media and technology (TMT), has warned of the challenges facing the telecoms industry in the year ahead. Like many other industries, the biggest issue it faces in 2023 is how it copes with the impact of inflation, particularly rising energy costs, and the reaction to any price rises that are passed on to customers. This is set against a backdrop of existing market challenges that are already testing the industry's ability to deliver services, open up new revenue streams and return value to shareholders.

The industry is experiencing a mix of declining revenue and increasing investment costs. It has underperformed compared to the market index over the past decade, reporting a low return in 2021 (7 percentage points below the European market, and a similar performance against the markets in North America and Asia), and it has some of the highest capital expenditure thanks to network and infrastructure investments, particularly relating to deploying 5G, the further evolution of 5G architecture and the prospect of 6G.

"After a decade of low inflation and low interest rates, the telecoms sector faces the uncertainty of how it will be affected by these cost increases and the degree to which it can increase its own prices in response," said Larry Goldman, Chief Analyst at Analysys Mason. "Combined with high investment costs and questions about potential returns, the market outlook is challenging as the telecoms industry tries to steer its path through price rises, rolling out network availability and launching new services."

Analysys Mason has outlined the 10 key focus areas for the telecoms industry in 2023.

1.  Price rises for telecoms services will become a political issue – operators may raise retail prices, but ARPU may not keep pace with inflation, meaning a cut in real terms.

2.  Telecoms operators were relatively unscathed in the pandemic but must now cut costs – they most focus on reducing energy costs, starting with decommissioning older networks.

3.  Telecoms operators will maintain 5G investment plans despite few prospects of short-term returns

4.  The metaverse will not materialise in 2023, but many more telecoms operators will align their roadmap to fit the vision of an xR-centric future

5.  Telecoms operators will not give up on digital services despite some mixed results

6.  Private networks take-up will continue, but progress will not be smooth

7.  Demand for multi-cloud connectivity will drive the launch of new solutions

8.  Open RAN will expand in rural and enterprise environments but the crucial massive MIMO challenge will remain inadequately addressed

9.  The use of SaaS deployment models will grow by 19% in the telecoms industry in 2023

10.  Direct satellite-to-device connectivity will enter a second wave – we expect significant developments in 2023 beyond the first moves made by Apple, Globalstar, SpaceX/Starlink and T-Mobile.

These observations are supported by more detailed analysis in three separate reports for: consumer and enterprise services, networks and software and satellite.

The full 2023 predictions can be found on the Analysys Mason website.

About Analysys Mason (www.analysysmason.com)

Analysys Mason is the world's leading management consultancy focused on TMT, a critical enabler of economic, environmental and social transformation. We bring together unparalleled commercial and technical understanding to deliver bespoke consultancy on strategy, transaction support, transformation, regulation and policy, further strengthened by globally respected research.

PDF - https://mma.prnewswire.com/media/1954389/analysys_mason_research_predictions_2023.pdf

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New technology is now the beating heart of patient care

Patient care and healthcare provision have always appeared among society’s top priorities, but keeping people well came into
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Patient care and healthcare provision have always appeared among society’s top priorities, but keeping people well came into sharp focus during the pandemic.

So, too, did the role of pharmaceutical companies – not least how amazing advances in medical science could help the world combat Covid, but also how the sector was remunerated for its efforts.

As we seek to move beyond the difficulties of the past few years, pharma firms now have the chance to make further advances and bring innovation to market and, in the process, gain competitive edge over their rivals.

The race is on

With an abundance of patient data to hand – GDPR compliance permitting – and cutting-edge technology to aid the development and delivery of new products, the race is on to escalate and improve patient care with solutions that can truly make a difference.

Patients aren’t blind to the tech-driven changes going on around them. We’ve been using wearable technology for decades already. Acceleration of this market really kicked in 20 years ago, when devices from Bluetooth headsets to smart watches came on-stream. Ever since, we seem to have been glued to screens to understand more about ourselves, tapping apps that promise to monitor everything from self-care to Circadian rhythms.

Wearables are becoming breakout technology in the pharma space, too. Biospace estimates the market for these types of devices that add to the patient care toolkit will grow from today’s $21.3bn to $196.5bn by 2030.

In effect, the possibilities are endless. We already have access to devices that monitor our heart rate and alert first responders if sensors detect a health crisis like a stroke or heart attack. Similar technology could be rolled out across society, accelerating critical treatment times.

Emergency response is the tip of the iceberg. All of the data produced by wearables – from blood sugar levels to monitoring changes in the menstrual cycle – can automatically be passed to frontline healthcare organisations, enabling professionals to read and appropriately respond.

Such tech is just one example of an area that is ripe with opportunity for pharma businesses. But there are lots of other exciting developments at our fingertips.

Biosimilars get the sector’s blood pumping

During the past few years, interest has been growing in biosimilars. If you’re unaware of these types of drugs, the NHS describes them as: “Biological medicines that have been shown not to have any clinical meaningful differences from the originator medicine in terms of quality, safety, and efficacy.”

Biosimilars are therefore biological medicines that are highly similar to another version already licensed for use, and they are now being recommended all the time. They are, of course, subject to the same NICE guidance as originator medicine it has already approved. NHS leaders believe biosimilars will create up to £300m of annual savings thanks to their speed of development, a timely saving in a challenging market that looks set to come under increasing financial pressure during the next few years.

Clinicians also note that the biosimilars market will rapidly develop and grow in complexity, since more pharma players will introduce their own treatments using these techniques. At the same time – with full patient/carer consent, it should be acknowledged – healthcare providers are beginning to offer patients biosimilar treatments, such that they should become widely recognised and hopefully accepted in short order.

Patients will experience biosimilars in different ways. For example, my own experience of biosimilars has been to help a global pharma company launch a biosimilar autoimmune drug. The really smart part about this development is the wider use of technology it taps into.

An app was developed so that patient symptoms could be monitored – for example, their baseline health indicators checked and logged, and dietary and exercise advice offered – and adjustments to the drug dose made accordingly by their healthcare provider.

Meanwhile, reading patient data and symptoms using this method will become commonplace. For the patient, constant improvements and updates to associated apps will present them with a slick interface to keep tabs on their own condition and ease access to support.

The wide-ranging benefits of tech-driven treatment

Of course, generations of patients have become used to traditional treatment methods. Whenever there is change it often happens slowly and people need to be persuaded about the benefits of such an evolution.

It’s useful to pause and summarise the reasons why different types of technology are now so important to developments in the pharma and healthcare sectors. Expressing its benefits can help win the hearts and minds of millions of patients the world over:

  • Constant ability to monitor symptoms – including emergency alerts
  • New interaction methods for healthcare providers and patients
  • Better control of treatment plans, including long-term care
  • Overall, a promise of quicker and more efficient service delivery

As mentioned, apps will be one of the main interfaces where this new type of professional-patient relationship takes place. According to a survey by NEJM Catalyst, a majority (60%) of clinicians and healthcare industry leaders believe effective patient engagement makes a serious impact on the quality of care, and can substantially decrease the costs in the system.

Anything that can be done to cure this problem must surely be viewed as a positive. A patient engagement app that improves the experience for physicians and patients is a valuable tool.

Digital tools augment the benefits of medical products, such as by the aforementioned remote monitoring features with the ability to collect important patient data. Overall, mobile patient engagement promises better efficiency for pharma firms’ treatments, doctors, clinics, medical associations, and the whole industry in general.

Pharma giants such as Pfizer, Merck & Co., and Novartis are actively equipping their representatives with innovative digital tools to strengthen their credibility and relevance, reconnect with target audiences, and improve the infrastructure around medical products.

The creation and provision of efficient medical apps for professionals contributes to wider efforts to overhaul treatment programmes.

Digital can be a cure-all for lack of awareness or understanding among patients about their conditions and what they can do to alleviate symptoms. It can also drive better communication between doctors and patients by removing red tape from the process, while maintaining compliance with medical regulations. And it can build efficiency into often overwrought systems, particularly the densely populated urban areas and underserved rural communities that are under the most pressure for different reasons.

Simply by providing apps that drive patient engagement and improve their experience of treatment and healthcare provision, user trust grows. Healthcare apps can be built for patients with a deep level of personalisation, with user-friendly and agile design to suit a wide range of demographic groups. And that’s really the heart of the matter.

Why connecting with the end user matters

Mass adoption of new technology-driven medicines, treatments, and healthcare services will only stand if patients – and therefore their healthcare providers – feel comfortable that this new wave will change their outcomes for the better.

Two elements are critical to society feeling comfortable: technology and communication. That means building and using platforms, from patient apps to portals for healthcare professionals that display information and advice from pharma providers.

By connecting the dots between the pharma companies using cutting-edge platforms for innovative drug delivery, their healthcare markets, and the patients who professionals exist to support we can create a virtuous circle.

Patients will play their own part in the healthcare delivery revolution and provide their data in real-time as part of a feedback loop that the pharma industry can use to refine and invent treatment.

Whether you work in pharma or frontline healthcare delivery, there is no doubt that tech innovation can – and must – be the beating heart of patient services and treatment. You only need to consider the advances it has helped other markets make. For example, observe how smarter use of customer data has shaken up the energy market, allowing consumers to take control by switching to a more suitable option in a few short clicks.

Then consider the wider advertising industry, which has evolved from mass TV marketing to one-to-one, personalised messaging, drawing on data and technology as its fuel.

It’s in this context that we should view the future of pharma and healthcare provision. Technology and the data it delivers can drive drug development, but also the use of medicine in ongoing patient care.

Health tech investment is set to swell as the private and public sectors join forces for the benefit of society at large, and patient demand for innovation in diagnosis and treatment increases. There has never been a better time for pharma leaders to consider new ways to deliver smart, efficient treatments – driven by technology that provides a platform for new medicines and user adoption.

About the author

Rachel Grigg, partnership director at LABS (part of Initials CX), has worked in digital technology for the past 25 years and has seen and been involved with the advent of digital transformation first-hand. Her roles have varied from working in large corporate companies designing technical products to being MD and COO helping small digital agencies grow and succeed.

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Remote-Work Revolution Has Wiped Out $453 Billion In Commercial Real Estate Value

Remote-Work Revolution Has Wiped Out $453 Billion In Commercial Real Estate Value

Leading up to the Covid-19 pandemic, roughly 95% of commercial…

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Remote-Work Revolution Has Wiped Out $453 Billion In Commercial Real Estate Value

Leading up to the Covid-19 pandemic, roughly 95% of commercial office space was occupied across the United States, according to US National Bureau of Economic Research (NBER) – a nonprofit, non-government organization. By March 2020, occupancy plummeted to 10%, and has only recovered to 47%, according to a new NBER report which claims $453 billion in office commercial real estate value has been wiped out in an "office real estate apocalypse."

Around the US, that resulted in a 17.5 percent decrease in lease revenue between January 2020, and May 2022, and not only because fewer offices were being occupied, but also because those that are being rented are going for shorter terms, lower prices per month, and a lot less floor space is needed as staff are told they can work from home for most or all the week.

Prior to the pandemic, 253 million square feet were rented per year; as of May 2022, just 59 million square feet had been rented, NBER's data indicates. "This indicates a massive drop in office demand from tenants who are actively making space decisions," NBER said. -The Register

What's more, while vacancy rates have hit a 30-year high, 61.7% of in-force commercial leases haven't come up for renewal since the pandemic - meaning that "rents may not have bottomed out yet."

What this means is that commercial real estate - a popular choice for pension fund managers and investors alike - may not be the best idea for the foreseeable future, given the continuing work-from-home options adopted by corporate America.

A common method used to invest in office real estate is commercial mortgage-backed securities (CMBS), which are managed and traded via commercial mortgage-backed indexes (CMBX) made up of pools of CMBSes. 

According to NBER, more recent CMBXes tend to include a higher percentage of office collateral than earlier vintages. Those newer, office-heavy CMBXes, NBER said, are what's losing the most money. -The Register

NBER says that in 2019, commercial real estate assets topped $4.7 trillion - offices being the largest component.

Read the report below:

Tyler Durden Thu, 12/08/2022 - 19:20

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Hotels: Occupancy Rate Down 7.7% Compared to Same Week in 2019

From CoStar: STR: US Hotel Occupancy Starts December Lower Than Pre-Pandemic WeekU.S. hotel performance came in higher than the previous week but showed weakened comparisons to 2019, according to STR‘s latest data through Dec. 3.Nov. 27 through Dec. 3,…

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U.S. hotel performance came in higher than the previous week but showed weakened comparisons to 2019, according to STR‘s latest data through Dec. 3.

Nov. 27 through Dec. 3, 2022 (percentage change from comparable week in 2019*):

Occupancy: 55.4% (-7.7%)
• Average daily rate (ADR): $141.71 (+10.2%)
• Revenue per available room (RevPAR): $78.50 (+1.7%)

*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Click on graph for larger image.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021.  Dashed purple is 2019 (STR is comparing to a strong year for hotels).

The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue) and close to 2019 levels.

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate continue to decline into the Winter.

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