IT services will provide a boost for telecoms operators’ B2B revenue growth
In 2024, telecoms operators’ investments in IT services will translate into sustained B2B revenue growth.
B2B and consumer revenues for many established operators have been falling in real terms. But after several years of investment in new IT skills and partnerships, operators’ efforts to expand their offerings look set to deliver a healthy return, at least in the B2B sector.
Revenue declines (driven by migration from legacy connectivity services) have now largely worked their way through the system. This leaves the way clear for services such as security, cloud and IoT, which continue to grow at double-digit rates, to make a real difference to operators’ balance sheets.
IT services have already grown from 20% of B2B revenue for an average operator in 2017 to over 30% in 2022/23 and look set to rise further in 2024. These IT services will push overall B2B revenue growth rates to a level above that achieved in consumer revenue, which is still driven mainly by voice, connectivity, and TV services.
Current growth is predominantly from the more established IT services: security, cloud, and IoT. Headlines are already full of the services of the future: private networks, enterprise 5G, AI and edge services. None of these are a panacea by themselves, but in aggregate they may enable operators to position themselves as more holistic solution providers and establish a wider range of products and revenue sources.
Many operators are already well positioned to harness the momentum in IT services. Their next challenges lies in finding the right balance between short-term growth – by extending established IT services to more customers, notably SMEs – and longer-term plans for the newer business services that can sustain ongoing growth.
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