Omdia says non-traditional categories of digital gaming, online video, messaging apps, smart home, and digital music are showing faster growth, with projected five-year CAGRs of 5%-21%.
Although of smaller value than established telco services such as mobile data, pay TV and broadband, these fast-growing markets will be worth US$513bn by 2027, the two biggest areas being digital gaming and online video.
Jonathan Doran, principal analyst of digital consumer operator strategy at Omdia commented says service providers must look beyond data and diversify into adjacent digital markets to enable the continued growth of their telco consumer businesses.
"Many have already invested in TV and online video entertainment, but there are other fast-growing markets telcos can also explore. Adopting the right go-to-market strategy and business model for each individual service area will be critical to strike the balance between achieving market success and mitigating financial risk."Jonathan Doran
Other areas offering the strong future potential for telcos include e-health and financial services, and several leading players have already started to invest in these spaces. SK Telecom owns South Korea’s most popular online store with over 34 million active customers, while Vodacom South Africa has over 1.1 million monthly active users (MAUs) for its VodaPay service.
All growth areas, however, will experience significant competition from hyperscalers - specifically the global tech giants Google, Amazon, Meta, and Apple.
“In many areas, telcos will need to accept that competing head-on is unrealistic and developing partnerships with such players is not only more pragmatic but will also serve to strengthen their own products and brands,” concludes Doran.