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Today's newsletter is a 14 min read:
- 🔮 2023 Trend Review: What are the key industry trends of 2023 and how will they impact law firms and their clients?
Boost for Telecoms
⏱️ In brief:
- 2023 is set to be a promising year for the mobile telecom industry via the growth of 5G but it will also face various challenges including increasing regulations, and supply issues.
A big year
2023 is shaping up to be a huge year for the mobile telecom industry. According to the Global System for Mobile Communications Association (GSMA), it has the potential to add $4.8 trillion to the global economy through improved productivity for its 5.5 billion subscribers. This is mainly due to the spread of 5G technology to countries like Argentina, India, and Vietnam, which is expected to push 5G subscriptions past the one billion mark.
- Worth noting: Not everything is rosy for the industry. Smartphone sales may slow down due to recessions and semiconductor supply issues. Additionally, while broadband is expected to reach more homes in the developing world, economic uncertainty may slow down telecom operators' spending, making it difficult for them to finance investments in their networks. This could lead to alternative growth strategies e.g. mergers and acquisitions in Europe and Asia.
In Europe, governments will continue to push for US tech firms to fund improvements to the region's digital infrastructure (although US big tech companies aren't too keen on that proposal). EU regulators are also expected to tighten regulations on big tech companies through the Digital Markets Act, set to take effect in early 2023, which aims to level the playing field for new players in the tech industry (we covered this here if you're interested!)
💼 What does this mean for law firm's clients?
- Telecom companies could see a boost in their profitability is 5G continues on a successful global rollout. On the flip side, they may also be affected by the increased competition and the need to invest in new technologies to keep up with industry developments. They would also have to comply with various laws and regulations regarding data protection, and net neutrality.
- Suppliers to the telecom industry would be affected by the developments in the industry, such as changes in demand for products or services. For example, a supplier of semiconductors may be affected by a slowdown in the demand for smartphones due to recessions or supply chain issues. Additionally, suppliers may be affected by the mergers and acquisitions that occur in the industry, which can lead to changes in the demand for products and services from different companies.
- Regulators would be affected by the developments in the mobile telecom industry as they are responsible for enforcing laws and regulations in the industry. For example, regulators may be affected by the roll-out of 5G technology and the need to ensure that it is done in a safe and compliant manner. Additionally, regulators may be affected by the mergers and acquisitions that occur in the industry, as they are responsible for ensuring that they comply with antitrust laws.
⚖ What does this mean for law firms?
- Corporate lawyers would advise on the legal and regulatory aspects of these transactions, including due diligence, contract negotiation, and compliance with securities laws. For example, they could advise a telecom company on the legal and regulatory aspects of acquiring another telecom company or advise on the legal implications of merging with another company. This could become a popular growth strategy for companies in this space in 2023 to acquire promising companies, and their 5G-related technologies.
- Regulatory lawyers will advise on compliance with various telecommunications laws and regulations. They would advise on issues such as compliance with Ofcom regulations, net neutrality, and data privacy, and help to navigate the complex regulatory landscape for telecom companies. For example, they could advise a telecom company on how to comply with regulations for data retention and data protection, or advise on the regulatory aspects of rolling out 5G technology.
- Intellectual Property lawyers can help to protect telecom companies' intellectual property rights and advise on issues related to licensing and commercialisation of intellectual property. For example, they could advise a telecom company on the patentability of new 5G technology or advise on the legal aspects of licensing a company's patented technology to other companies as part of the deployment of 5G to new regions.
- Litigation lawyers will advise on telecom companies' disputes with regulatory bodies. For example, they could advise a telecom company on the legal strategy for a dispute with a regulator over a violation of regulations relating to 5G deployment or advise on the legal strategy for a lawsuit brought by a customer over a breach of contract.
What about the Property Market?
- The property industry is expected to see a slowdown in sales in 2023, with challenges in mortgage lending and market fluctuations in different regions.
The property industry is expected to see sales worth $5.8 trillion in 2023, which is just a 1% increase from 2022. Higher interest rates may affect mortgage lending and cause some markets to see a drop in house prices.
- Worth noting: In the UK, prices may decrease by 5% due to the end of their Help to Buy scheme, and in Australia, prices may drop by 9%. The property market in the US may also see a slowdown after the pandemic boom. Globally, builders may be hesitant to start new projects due to uncertainty in demand, high costs, and labour shortages.
On a positive note, office completions are expected to stay high in many cities as investors look for safe havens and reliable rents to offset inflation. It's worth noting that these figures don't include China, where the property market is fragile and data is scarce. Despite this, demand is expected to increase as covid restrictions are lifted. Additionally, India's luxury market is expected to remain strong, and second-home owners may be attracted to the idea of hybrid working options.
💼 What does this mean for law firm's clients?
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