The transformation game

The transition to tech-cos requires a mindset shift for telcos - not just in terms of service offering, but also in how they get there

With everything that has been said and promised about 5G over the years, it is easy to forget that the global rollout of the technology only began a matter of months before the pandemic. Despite all the challenges of the past few years, 5G is being adopted at a faster rate than 4G was at a similar stage of its lifecycle. And with its increased adoption, some of those 5G promises are starting to come to fruition.

For telcos, this cannot happen quickly enough. The traditional connectivity services market is brutally competitive. In India, for example, there are 84 mobile subscribers per 100 people. This level of saturation leads to price wars and high customer churn, which is a recipe for high acquisition costs, tight margins and low average revenue per user (ARPU).

The real drawcard of 5G for telcos is that it allows telcos to diversify. Accordingly, they will need to improve internet connectivity and reliability to serve B2B customers closer to the edge of the network with additional services and solutions. For example, they can build bundles of tech services such as 5G connectivity, data, cloud services, cyber security and professional set-up services, using an everything as a service (XaaS) model.

These bundles of B2B solutions represent a revenue lifeline for telcos. APAC’s public cloud services market is set to exceed USD 153 billion by 2026, with a faster compound annual growth rate (CAGR) than in the US. Similarly, the software as service (SaaS) market is expected to exceed USD 58 billion by 2026, accounting for 40% of the APAC cloud services market.