The telecommunications industry will potentially acquire more than USD 400 billion in the enterprise sector, equating to 35% of the existing mobile operator revenue base worldwide, according to a recent report by GSMA Intelligence.
The study revealed that while core telecom services, such as Software-Defined Wide Area Network (SD-WAN), unified communications, and mobile voice and data, account for 70% of business-to-business (B2B) revenues, they are likely to experience limited growth. These core services, generating USD 250 billion in 2023 are expected to attain a compound annual growth rate (CAGR) of 3% through 2030.
In contrast, enterprise expenditure on technology services outside of core services is approximately five times greater than expenditure on traditional communications, reaching USD 1.16 trillion in 2023. This includes services like cloud computing, data centers, cybersecurity, the Internet of Things (IoT), analytics, artificial intelligence (AI), and blockchain. These sectors are expected to grow at a 14% CAGR until 2030, with market potential increasing to USD 2.91 trillion.
Tim Hatt, GSMA Intelligence’s Head of Research, stated, “Telcos looking to monetize their investments in 5G need to look beyond consumer-centric and basic connectivity-driven use cases. Greater focus is needed on offering advanced network solutions such as network slicing and private networks in the short term and developing end-to-end solutions to support a variety of enterprise use cases combined with integration capabilities in the longer term.”
The report emphasizes the need for telecommunication companies to transcend beyond connectivity-driven solutions and services to leverage the remarkable opportunity.
“Enterprises are increasingly looking for service providers to integrate a blend of technologies that fit their specific technology environments and business needs. Though the competition is fierce, telcos have assets and capabilities they can leverage to play in over one-third of this trillion-dollar market,” Hatt added.
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The Four Key Verticals
The GSMA report highlighted the characteristics of four key verticals, including financial services, manufacturing, automotive, and aviation.
In 2023, these sectors presented a combined addressable market valued at USD 159 billion, accounting for 37%. Financial services and manufacturing emerged at the top with opportunities valued at USD 159 billion and USD 61 billion, respectively, while automotive and aviation followed with USD 22 billion and USD 16 billion.
The forecast indicates solid market growth, with a CAGR expected to accumulate 10.9% (financial services), 12.1% (manufacturing), 12% (automotive), and 8.4% (aviation) from 2023 to 2030.
In addition, other markets represent an additional 63% of telcos’ growing addressable enterprise tech services outside of core opportunities. These include healthcare, the public sector, retail, media, smart cities, energy and utilities, agriculture, oil and gas, transportation and logistics, professional services, personal and consumer services, and mining and ports.
Jo Gilbert, GSMA Intelligence’s Technical Director, said, “To bolster operational efficiency, resilience, agility, and flexibility, manufacturing companies are investing in advanced connectivity, IoT, edge and AI technologies. These innovations are generating massive data volumes across factories, requiring stronger data management capabilities to unlock business value.”
Gilbert also noted the growing convergence of IT and OT systems which have expanded cyberattack surfaces, making cybersecurity a key priority for manufacturers.
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Telco Preparations
The study underscores that operators are facing competition from a wide array of players, including hyperscalers and security vendors, to meet market demands.
According to the report, 24% of operators acknowledge hyperscalers as significant competitors in edge networking and cloud services, while 41% view security vendors as formidable competitors in security.
The GSMA’s Head of Research indicated, “Winning in the market needs a new mindset and operational changes. To succeed, operators must look to collaborative approaches and new partnerships as well as adopting an enterprise-centric solution-oriented approach; being more like IT consultants than connectivity sellers.”
Furthermore, Hatt stressed the need for telcos to consolidate and simplify their enterprise portfolios, adapt their sales and marketing strategies, and acquire new technical and commercial skills. These strategies aim to effectively respond to the ever-evolving demands of enterprise customers.
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