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Do Businesses Really Want Telco Services Beyond Connectivity?

By Diana Goovaerts | June 7, 2017

Telecom operators have lately been pushing to expand their service offerings to include value-added solutions for enterprise beyond just basic connectivity. Companies like Verizon, AT&T, and Sprint have all thrown themselves into the creation and delivery of new services across the Internet of Things, data analytics, cloud services, and more. But new data from ABI Research indicates technology decision-makers in enterprise just aren’t that into some of these new telco services.

According to ABI’s data, more than half (55 percent) of technology implementers said they expected to use telcos for connectivity alone. Only 13 percent said they expected telcos to create new ecosystems for IoT, data, IT, and cloud services. And the latter is a particularly sore spot. Just 4 percent of implementers said they use telcos for cloud computing services today – a figure ABI said is expected to drop to 1 percent in the next five years.

“Verizon has done well to offload its cloud businesses and other Tier One telcos will follow,” ABI Research Director Dimitris Mavrakis predicted. “Competing with Web-scale companies in their own field is impossible for telcos. Implementer requirements and telco strategies seem to be disparate for the moment. For example, telcos are focusing on the automotive vertical, but our survey indicates that the retail, government, and logistics markets are very interested in telco services.”

But there is hope for value-added services in the pipe.

ABI’s data indicated nearly a third of technology implementers in enterprise favored “connectivity plus” services, which the firm defined as the bundling of vertical-specific services on top of connectivity. In these cases, ABI noted telcos can take advantage of their existing assets, like data, devices management, applications and services management, security, and analytics to add value for implementers.

ABI’s full report, “Industry Survey: Transformative Technology Adoption and Attitudes – Implementers’ Perspective of Telco and Cloud,” can be found here.


Filed Under: Carriers

 

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