In a saturated and competitive market, network infrastructure investments, digital business models, and value-added services are imperative for future growth

The Asia-Pacific region experienced rapid growth in digitalization in a short period, resulting in transformational market trends such as remote working and online learning. Enterprises are progressively adopting next-generation ICT solutions such as cloud technology, big data, artificial intelligence-drive mechanisms, and enterprise-grade networks to support the digital transformation revolution. The region has witnessed considerable growth in the adoption of rich media content and digital services like video streaming and conferencing, digital financial services, and eCommerce to meet consumers’ evolving digital lifestyles. The trends disrupted and transformed the industry, which can expect revenue to record a CAGR of 3.6% from 2021 to 2027, generating approximately $489.24 billion by 2027.

The hyper-connectivity environment has reinforced the importance of Telcos, which play a foundational role in supporting consumers’ and enterprises’ connectivity and collaboration needs. Telcos must understand rapidly evolving customer needs and preferences and cater to these network and digital requirements. Frost & Sullivan’s research found that network infrastructure investments, digital business models, and value-added services are vital for the future growth of Telcos.

Robust network infrastructure is essential, especially as network traffic volume increases and shifts to residential and rural areas. Telcos recognized that investments to improve network performance helped them gain market share, and many expedited the launch of 5G services to capture the opportunities. 5G’s higher speeds, lower latency, and support for higher-density endpoint deployments promise to address rising network traffic volume and enhance the performance of digital, advanced, and mission-critical applications. For the region, private 5G networks and 5G fixed wireless access are examples of top use-cases deployed by Telcos to address customers’ changing network requirements. However, the adoption of 5G services in the region is slower than expected. Frost & Sullivan’s research found that the main challenge cited by Telcos in driving 5G services adoption is selecting the application that provides value-add and will drive customers to pay more for network services. In Asia-Pacific, Telcos identified 5G-enabled content, immersive experiences with augmented and virtual reality, and cloud gaming as top use cases to drive 5G services adoption. Instead of offering connectivity as a standalone option, Telcos should focus on monetizing distinctive customer experiences by partnering with content providers and device manufacturers to drive the adoption of 5G services.

The rise of digital transformation pressured Telcos in the region to shift focus and develop the technology aspect of the value chain with disruptive technologies such as cloud computing, artificial intelligence, edge computing, and next-generation networks like IoT and 5G. In particular, Telcos have recognized the increasing demand for a seamless and personalized experience for customers and have accelerated the implementation of artificial intelligence to gain insights for network optimization, predictive maintenance, and new, innovative services. Digital business models enable Telcos to capture new market opportunities within vertical industries like healthcare, manufacturing, and financial services. However, Telcos have capability gaps and should carefully choose partners to collaboratively develop joint solutions for connectivity-enabled services, applications, and platforms.

Lastly, value-added services can address varying customer needs. The industry is experiencing a rise in devices, data, and cyberattacks due to market trends, which strained network infrastructure and impacted customer experience. Consequently, the industry is witnessing high demand for additional value-added services like advanced security, higher capacity, and coverage. Telcos in the region launched cybersecurity solutions, including managed security and digital asset management services, to address security challenges, especially for small-medium enterprises. Telcos are also bundling high-speed internet services with Wi-Fi networking gear such as router extenders and mesh systems to improve customer experience with connectivity at home. Telcos should consider offering add-on services or standalone services beyond their core competencies. With differentiated service offerings, Telcos can implement premium pricing to boost revenue.

Investments for network infrastructure upgrades, digital business models, and value-added services are growth strategies for Telcos to secure future growth and revenue opportunities in the industry. Telcos have the network quality and are well-positioned to move beyond connectivity to play an extensive role in the industry’s value chain from device to the platform to application and services and become end-to-end solution providers of disruptive technologies and next-generation networks.

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About Sofea Zukarnain

Sofea Zukarnain is a Research Analyst for the ICT team at Frost & Sullivan in Malaysia. She has more than three years of market research experience within the telecommunication services industry in Asia-Pacific, focusing on the Mobile & Wireless sector. Her expertise lies in publishing research studies and webinars through conducting secondary and primary research on telecom operators and vendors to monitor and analyze market trends, emerging technologies, and competitive landscape and identify growth opportunities.

Sofea Zukarnain

Sofea Zukarnain is a Research Analyst for the ICT team at Frost & Sullivan in Malaysia. She has more than three years of market research experience within the telecommunication services industry in Asia-Pacific, focusing on the Mobile & Wireless sector. Her expertise lies in publishing research studies and webinars through conducting secondary and primary research on telecom operators and vendors to monitor and analyze market trends, emerging technologies, and competitive landscape and identify growth opportunities.

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