GSMA Report Reveals $400B Opportunity for Telcos in the Enterprise Space

The enterprise space represents an addressable market of more than $400 billion for telcos looking to grow their revenues, according to a new report by GSMA Intelligence.

This is approximately 35% of the existing mobile operator revenue base worldwide.

The report “The Opportunity for Operators in B2B Technology Services” focused on four key verticals: financial services, manufacturing, automotive and aviation.  

It noted that slow average revenue per user in the connectivity business means revenue diversification is imperative for telcos. 

Core telecom solution and service areas, such as SD-WAN, unified communications and mobile voice and data, currently contribute around 70% of B2B revenues or $250 billion for operators in 2023. But they are expected to have an annual growth rate (CAGR) to 2030 of only 3%, according to the report.

Conversely, enterprise spending on tech services beyond core ones is around five times the spend on traditional communications at $1.16 trillion in 2023, with a CAGR of 14% to 2030, growing to become a market worth $2.91 trillion. Tech services include cloud and data centers, cybersecurity, IoT, analytics, AI, blockchain and network APIs. 

Telcos looking to monetize their investments in 5G need to look beyond consumer-centric and basic connectivity-driven use cases, said Tim Hatt, head of research at GSMA Intelligence.

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“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,” he said.  

“Enterprises are increasingly looking for service providers to integrate a blend of technologies that fit their specific technology environments and business needs.”

Telcos have assets and capabilities they can leverage to play in over one-third of this trillion-dollar market, he added. 

In 2023 financial services, manufacturing, automotive and aviation presented significant addressable opportunities for telcos, valued at $59 billion, $61 billion, $22 billion and $16 billion respectively.

Projections indicate robust growth for these markets, with expected CAGR of 10.9%, 12.1%, 12.0%, and 8.4% respectively from 2023 to 2030. 

However, to meet market demands, operators face significant competition from a broad array of players, including hyperscalers and security vendors. The former, 24% of operators view them as formidable competitors in edge networking and cloud, while 41% view the latter as key competitors in security, the report found.

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Winning in the market therefore needs a new mindset and operational changes, said Hatt. 

“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,” he said.