Financial and manufacturing services offer the greatest opportunity for telcos to drive enterprise digital transformation
October 7, 2024, MWC Las Vegas 2024: A new report from GSMA Intelligence released today ahead of MWC Las Vegas – “The opportunity for B2B technology services operators: dimension growth prospects in financial services, manufacturing, automotive and aviation.” – highlighting a $400+ billion addressable market for telcos looking to grow revenue in the enterprise space. This is equivalent to approximately 35% of the revenue base of existing mobile operators worldwide.
The report also shows that telcos must look beyond connectivity-driven solutions and services and take a broader view of the opportunity. Major areas of telecom solutions and services, such as SD-WAN, unified communications, and mobile voice and data, currently contribute around 70% of B2B revenue or $250 billion for operators in 2023, although they offer little room for growth. growth with only 3% compounded annually. expected growth rate (CAGR) until 2030.
By contrast, business spending on technology services beyond those core services (including cloud and data center, cybersecurity, IoT, analytics, artificial intelligence, blockchain, and network APIs) is approximately five times greater than traditional communications spending: $1.16 trillion in 2023, with a CAGR of 14.% through 2030, growing to become a market valued at $2.91 trillion.
Tim Hatt, head of research at GSMA Intelligence, said: “Telcos looking to monetize their 5G investments must look beyond consumer-centric, basic connectivity-based use cases. Greater focus is needed on delivering advanced network solutions, such as network slicing and private networks in the short term, and on developing end-to-end solutions to support a variety of enterprise use cases combined with long-term integration capabilities. Enterprises are increasingly looking for service providers that integrate a mix of technologies that fit their specific technology environments and business needs. Although competition is fierce, telcos have assets and capabilities they can leverage to play in more than a third of this trillion-dollar market.“
Manufacturing and financial services offer greater opportunities
The report highlights the characteristics of four key verticals: financial services, manufacturing, automotive and aviation. In 2023, these sectors presented significant addressable opportunities for telecommunications companies, valued at $59 billion, $61 billion, $22 billion and $16 billion respectively. Together, they represented 37% of the total addressable market opportunities, equivalent to 159 billion dollars. Projections indicate solid growth for these markets, with an expected CAGR of 10.9%, 12.1%, 12.0% and 8.4% from 2023 to 2030.
Other markets accounted for 63% of telcos' growing addressable enterprise technology services beyond core opportunities. This growth is driven by various verticals, including healthcare, public sector, retail, media, smart cities, energy and utilities, agriculture, oil and gas, transportation and logistics, professional services, personal and consumer services , mining and ports.
Jo Gilbert, Technical Director and Connected Manufacturing and Production Lead at GSMA, said: “To strengthen operational efficiency, resilience, agility and flexibility, manufacturing companies are investing in advanced connectivity, IoT, edge and artificial intelligence technologies. These innovations are generating massive volumes of data across factories, requiring stronger data management capabilities to unlock business value. Additionally, the increasing convergence of IT and OT systems has expanded cyber attack surfaces, making cybersecurity a key priority for manufacturers..“
Telecommunications companies must be prepared to compete with a wide range of players
To meet market demands, operators face significant competition not only from their peers and equipment suppliers, but also from a wide range of players, including hyperscalers and security providers. In fact, 24% of operators see hyperscalers as formidable competitors in edge and cloud networks, while 41% see security vendors as key competitors in security.
Operators must invest in creating new capabilities, enhancing their existing offerings in key areas such as security and exploring partnerships in others such as the cloud. By balancing internal investments with external partnerships, operators can remain competitive, optimize resources and meet changing market demands.
Hatt continues: “Winning in the market requires a new mindset and operational changes. To be successful, traders must look for collaborative approaches and new partnerships, as well as the adoption a business-focused and solutions-oriented approach; looking more like IT consultants than connectivity salespeople. “Telecommunications companies need to consolidate and simplify enterprise portfolios, adapt sales and marketing, and acquire new technical and commercial skills to effectively serve the constantly evolving needs of enterprise customers.”
Services beyond connectivity are gaining ground
The latest research follows the study's earlier findings”Business opportunity 2024“ survey, published in March 2024, where 36% of operators said that market leadership in connectivity and business services is the main objective of their B2B strategy; followed by leadership in business connectivity. Connectivity has historically received the highest share in previous editions of this survey. This is the first time that operators have identified connectivity and services as its main objective. Additionally, the majority (64%) of participants said they had already launched 5G services beyond enterprise connectivity, such as 5G IoT, private networks, and Mobile Edge Compute. This indicates a shift in focus towards services and the need to be good at combining connectivity with services suited to business needs.
New business survey will be presented at MWC Las Vegas 2024
As part of our participation at MWC Las Vegas 2024, GSMA Intelligence will offer an exclusive preview of the upcoming results of the GSMA Intelligence Digital Transformation Survey 2024 at the GSMA Pavilion on the exhibition hall, booth 557, one month before the launch official. The survey, conducted with more than 4,200 companies across 10 verticals and 21 countries, provides a deep dive into digital transformation trends in key sectors such as manufacturing and financial services.
Attendees at MWC Las Vegas 2024 will have the opportunity to explore our interactive panel, which displays information on emerging technologies such as 5G, AI, IoT and more. Visit the booth to get early access to these insights before the full report is released.
About the GSMA
The GSMA is a global organization that unifies the mobile ecosystem to discover, develop and deliver critical innovation for positive business environments and social change. Our vision is to unlock the full power of connectivity so that people, industry and society thrive. Representing mobile operators and organizations across the mobile ecosystem and adjacent industries, the GSMA offers its members three broad pillars: connectivity for good, industry services and solutions, and outreach. This activity includes advancing policy, addressing today's biggest societal challenges, supporting the technology and interoperability that make mobile devices work, and providing the world's largest platform to convene the mobile ecosystem at the MWC and M360 series of events.
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About GSMA Intelligence
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