The telecom wholesale market in its various forms has remained stable in 2020 – Influenced by an overall decline in international roaming revenues (as much as 50%) due to the lockdown measures, and an increase in connectivity and growth in traditional wholesale services.

Telecom wholesale drivers include:

  • Build out of FTTx coverage in some home and business markets due to the lockdown. Recent announcements include the US operator CenturyLink planning to connect 300,000 homes and small businesses to its fiber network, and with a plan to add another 400,000 in the future.
  • Continuing expansion of backbone network infrastructure, particularly to connect countries in Africa and Asia. Recent examples include expansion of Vodafone’s footprint in Europe and sub-Saharan Africa with the announcement of SHARP, its 37,000km of new subsea cable. SHARP will capitalize on Vodafone’s previous strategic initiatives with partners like Vodacom and Safaricom to build a digital society for this region.
  • Growth in international voice traffic through partnerships between global providers and local country entities. Here global players will be able to gain country footprint, whereas the local country providers will benefit by enabling their home customer base to gain global access with business quality connections. Orange is one recent example where we have seen this occurring with its partnership with PLDT in Philippines to aggregate international voice for inbound traffic terminating on the PLDT and Smart network.

A shared vision

GlobalData recently conducted a study (Global Outlook Report: International Wholesale, Transition to Growth) for the telecom wholesale market, where we interviewed senior level executives across a number of global telecom companies.

What was evident from the findings was the level of commonality with respect to a shared vision in terms of opportunities that exist. However, the factors that influence the variations in strategic direction reflect how organizations and businesses evolve.

In summary, our findings highlighted that incumbent telecom wholesalers are less agile due legacy networks and systems in addressing future digital wholesale opportunities compared to non telco wholesalers that have strong systems integration and IT services capabilities – these group of players seem to be pushing the digital wholesale agenda more aggressively through an evolving partner ecosystem around IoT and M2M applications for Automotive, Industrial IoT, Transport and Logistics.

The third dimension to this includes the innovation and disruption the cloud and pure wholesale providers bring to the table with their cloud deliver models.

Innovation and technology are key for telecom wholesale

Surprisingly enough, for a segment that sells on providing wholesale connectivity, telecom wholesalers out of all the sub segments in the telecommunications sector seem to be going all guns in 2020 and embracing innovation and technology to help them launch and define products/services, as well as create market differentiation.

Incumbent telecom providers continue with robust wholesale portfolio strategies and marketing effort to gain more footprint in regions like Africa and Asia for international voice, as well as drive solutions in mobile messaging. They are also utilizing their network capabilities to offer high touch digitized wholesale solutions in applications like IoT and M2M.

Examples include companies like Telefónica International Wholesale Services (TIWS) and Orange International Carriers offering strong and innovative set of products focusing on customers in key markets by focusing on digital technologies and strong security credentials.

Additionally, players like Colt are seeking to become edge computing wholesalers through their MEC facilities, and cloud providers like Google are delivering comprehensive strategies in the telecom segment helping telecom companies monetize 5G, customer data-driven experiences, and improving operational efficiency of telco core systems.

Wholesalers are becoming agile and open

A key observation from all of this is that digitalization, automation and standardization is driving wholesalers to be more agile and open. Subsequently, wholesale providers across the board are harnessing virtualized communications, business intelligence, machine learning and blockchain in their products and wholesale delivery architecture.

However, digital strategies need to start from a bottom up approach across the entire telecom architecture stack, and level of maturity versus future monetization opportunities across 5G and IoT/M2M will dictate who the laggards and leaders are.

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