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Telecoms operators’ enterprise revenues forecast to rise just 1% by 2022

Analysys Mason research highlights major opportunity for telecoms operators to grab share of ICT services market

Analysys Mason has released its forecast for the global telecoms enterprise services market, which predicts that the worldwide market for telecoms business services will grow from $411 billion (USD) in 2017 to $415 billion in 2022. The report forecasts a challenging market, with less than 1% growth over the next five years, but highlights opportunities for operators to work towards a share of the enterprise ICT market.

The report identifies revenue streams that compensate for falling income from traditional services. It finds that operator revenue from enterprise voice and data services has reached a saturation point, especially in high-income markets, and is in decline. Emerging markets will see growth of 2-3% per year until voice and data connectivity is more widespread.

Internet of Things (IoT) connectivity revenue will increase sharply at over 10% per year to fill some of the void left by voice and data revenues, accounting for 7% of operator enterprise revenue by 2022. However, the biggest opportunity for operators is to fight for a share of the rapidly growing enterprise ICT market, which is estimated to be worth more than $230 billion by 2022.

"Operators need to look at this as an opportunity to upsell new services," said Catherine Hammond, senior research analyst at Analysys Mason. "When you're hitting the wall in terms of revenues, it's about bundling, upselling and retaining customers by serving them with a bigger, better package of services. By providing cloud and business services to all sizes of enterprise, operators will be able to sustain their revenue and make themselves increasingly valuable to their customers."

The enterprise ICT market is highly fragmented and operators are well placed to create bundled offerings of services for business customers, such as security, data storage, and other cloud services. By adapting their offerings and creating packages across all levels of business customer, especially those with fewer than 10 employees, operators can shore up enterprise revenues. Analysys Mason predicts that operators should expect to own at least 15% of this market by 2022, but individual operators could take a larger share by concentrating on partnerships and, especially, through acquisition.

Regional variations

  • North America currently accounts for a large proportion of global enterprise revenue, but revenue is falling year on year (CAGR of -1.4%
  • Western European enterprise revenues will be flat between 2017 and 2022
  • In much of Africa and the Middle East, markets are currently small but they are growing rapidly (CAGR of 2.8% in Sub-Saharan Africa)
  • Operators in Emerging Asia-Pacific benefit from both sizeable markets and sizeable revenue growth of 2.6% per year between 2017 and 2022

Analysys Mason is launching two reports: "Telecoms services for large enterprises: Worldwide forecast 2017-2022" and "Telecoms services for small and medium-sized enterprises: Worldwide forecast 2017-2022".