• TM Forum survey identifies growth drivers for Asia Pacific telcos
• Cybersecurity and AI-related opportunities seen as key in the B2B sector
• Payments and IoT offer potential growth in the consumer market

AI-related services, mobile payments and cybersecurity have been identified as key growth opportunities among telcos in Asia Pacific, according to a recent report from TM Forum, as the operators take a decisive shift away from legacy pay-TV and video services.

More than 52% of the 40 executives from 28 telcos surveyed for the recent TM Forum report – Asian Operators Search for Revenue Growth Opportunities – said mobile payments/financial services represent a “significant opportunity” for revenue growth, only slightly behind core services, such as mobile and fixed broadband, which were cited as a major growth opportunity by 59% and 54% of respondents, respectively.

This was followed by smart home and consumer internet of things (IoT), which was identified as a significant opportunity by 44% of respondents, and consumer AI services, which are being developed by operators such as SK Telecom with its A-dot (A.) personal assistant.

For the business-to-business (B2B) services sector, nearly two-thirds (62%) highlighted security-as-a-service as a significant growth opportunity with enterprise customers. Operators pointed to new partnerships, acquisitions and white labelling as ways to harness new cybersecurity revenue opportunities: For example, Japan’s KDDI acquired cybersecurity specialist LAC earlier this year to boost its security services portfolio.

Sovereign AI, cloud computing, AI infrastructure and IoT were also identified as key opportunities for B2B revenue growth, with the likes of SK Telecom, which recently accelerated its AI infrastructure plans, Singtel and Telekom Malaysia investing in sovereign AI services and AI infrastructure opportunities – see Under the hood of SKT’s Ulsan AI datacentre, Singtel’s sovereign cloud play and Telekom Malaysia joins Asia’s GPUaaS gang.

Network slicing and other differentiated connectivity was named as a significant source of revenue by 29% of respondents, although 25% dismissed this as only a minor opportunity, showing a split among the sector. Similarly, CSPs were divided over the potential of network-as-a-service to drive growth (with 31% citing it as a significant opportunity and 30% a minor one). Respondents were even less enthusiastic about the monetisation of network APIs, with 26% labelling this a minor opportunity, ahead of 23% who identify a significant opportunity here. 

Across the consumer and enterprise sectors, satellite-enabled services were identified as an area of interest to some Asian telcos, with around a quarter of the region’s operators identifying mobile satellite services as a significant growth opportunity, though more than 40% saw this as only a minor growth opportunity. Notably, the likes of Japan’s KDDI have struck partnerships with providers such as SpaceX to launch direct-to-device services.

In terms of the network and technology investments needed to support revenue growth, some 68% said AI enablement for sales, marketing and customer service is “extremely important,” while network automation (57%), BSS transformation (51%), and composable IT architectures (50%) outrank traditional 5G investments as top priorities.

Dean Ramsay, principal analyst at TM Forum, stated: “Operators are racing to expand revenue beyond connectivity. AI, automation and open IT architectures are now essential for sustainable growth. Underpinning this shift, open digital architecture has never been more relevant as a proven path to streamline architecture, modernise systems and automate operations as operators pursue innovation and growth.”

The report also highlighted how operators across Asia are looking to breathe new life into their stagnant or slow connectivity offerings, a trend that is reflected in the global telco sector: In 2024, telco service (B2B and B2C) revenues grew by 3% globally, while inflation was between 4% and 5%, according to the report.

- James Pearce, Contributing Editor, TelecomTV