GSMA Report: Telco's US$500bn Enterprise Pivot
For years, the core business of the telecom sector has been connectivity, but a new, vast frontier of opportunity is opening up in the enterprise space. According to a recent GSMA Intelligence report, "The telco culture pivot," a monumental shift is necessary for operators to capitalise on this lucrative market. To do so, they must move beyond their traditional roles.
The report notes, “a massive business-to-business (B2B) technology services market, valued at nearly US$500bn, exists beyond their core connectivity offerings”. It is not a minor adjustment; it is a fundamental call for cultural and operational transformation.
The scale of the enterprise prize
The numbers are staggering. The addressable B2B technology services market for operators stands at an estimated US$490 billion in 2024, with projections showing it could soar to US$990bn by 2030.
The revenue is entirely incremental to existing connectivity sales. The demand is not uniform, it is heavily concentrated in specific sectors that are deep into their digital transformation journeys. Manufacturing, financial services, automotive and aviation are the primary drivers, accounting for almost 40% of the opportunity.
The key revenue streams are found in high-demand product areas like cloud and data centres, which represent over half of the market, alongside critical services such as cybersecurity and the Internet of Things (IoT).
Understanding the modern enterprise
To reap rewards, telcos must understand that the needs of modern businesses have evolved significantly. As the analysis points out, “Enterprise needs are specific and go far beyond basic connectivity.
"The report's survey data reveals that cybersecurity and cloud services are the highest priorities for businesses undertaking digital transformation.”
Businesses are not looking for off-the-shelf products but for partners who can help them solve complex challenges.
The reality means a product-centric sales model is no longer fit for purpose. The analysis continues, stating that “There is no 'one size fits all' approach. Enterprise objectives vary significantly by industry, requiring customised solutions and deep domain expertise rather than off-the-shelf products.”
Furthermore, with emerging technologies like Generative AI becoming central to transformation efforts, the demand for specialised, integrated solutions will only intensify.
The hurdles on the path to transformation
The path to becoming a digital services provider is fraught with challenges.
The report highlights a concerning gap between the opportunity and the current reality for many operators: “Despite the opportunity, operators have struggled to gain traction outside of their core services, with only about 11% of enterprises using them for non-connectivity solutions like cloud or cybersecurity.”
The struggle stems from deep-seated internal issues. Outdated, rigid business models clash with the enterprise need for flexibility. Perhaps the most significant barrier is the talent deficit: “A major challenge is the internal skills gap, especially in AI. On average, less than 30% of an operator's workforce is trained in AI beyond basic awareness.”
Without the right expertise in data engineering, software development and IT consulting, telcos will find it impossible to compete with more agile, specialist providers.
A roadmap for reinvention
The challenge is significant, but not insurmountable. The report provides a clear roadmap for the necessary evolution.
The core message is that “To capture this revenue, operators must undergo a significant cultural and operational transformation, evolving from connectivity sellers into integrated digital service providers.”
It is more than just a change in product catalogues: “This requires a new mindset, organisational restructuring, strategic partnerships, and a more flexible, customer-centric approach to sales and product development.”
Success stories are already emerging from operators who have embraced the change. The creation of dedicated B2B subsidiaries like Telstra Purple and Singtel Enterprise allows for greater autonomy and a culture tailored to enterprise clients. Furthermore, the complexity of today's tech landscape demands a new approach to collaboration. Embracing "co-opetition" by forming consortia with systems integrators, hyperscalers, and even competitors—as seen in the Orange and Capgemini "Bleu" sovereign cloud venture, is essential to delivering the comprehensive solutions customers demand.
The message from GSMA Intelligence is unequivocal: the future of growth for telcos lies in the enterprise market.
The opportunity is immense, but it is not guaranteed. It demands a courageous pivot away from the comfort of selling connectivity towards a new identity as a trusted digital transformation partner.
Success will belong to those who not only invest in new technology but commit to the difficult, yet essential, work of transforming their culture, skills and strategic outlook.
