Telcos have various irons in the fire for strong future potential, from digital gaming and online video to eHealth and financial services – but they will continue to feel the pinch from Big Tech hyperscalers.
That is the verdict of analyst firm Omdia who argues in its latest report that while telcos have already invested in areas around TV and online video entertainment, there are other markets to explore, but competing with hyperscalers is ‘unrealistic’. The report, Quantifying the Consumer Telco Opportunity 2023 (subscriber only), aims to assist service providers in developing future digital service roadmaps.
Traditional telco services, such as mobile data, pay TV, and broadband, remain the biggest pots available for operators. Yet Omdia noted that fast-growing non-traditional categories, also including messaging applications, smart home and digital music, will be worth $513 billion by 2027. Of these, the two biggest areas are digital gaming and online video.
But looming large on the horizon are Google, Amazon, Meta and Apple, and much like the cloud wars of a decade ago, taking on the biggest tech players – and biggest spenders – is a fool’s errand.
Partnerships are therefore key. According to the analyst’s benchmark report around digital consumer operator strategy, the more service providers actively invest in a given area, including through partnerships, the bigger market impact they can have. This translates to potentially a bigger slice of overall market revenue.
“In many areas, telcos will need to accept that competing head-on [with hyperscalers] is unrealistic and developing partnerships with such players is not only more pragmatic but will also serve to strengthen their own products and brands,” said Jonathan Doran, principal analyst, digital consumer operator strategy at Omdia.
“Service providers must look beyond data and diversify into adjacent digital markets to enable continued growth of their telco consumer businesses,” Doran added. “Adopting the right go-to-market strategy and business model for each individual service area will be critical to striking the balance between achieving market success and mitigating financial risk.”
Photo by GR Stocks on Unsplash
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