Rethinking growth: operator revenue diversification is real and global

Revenue diversification is not a completely new trend for operators. However, recent developments show that it has become more important than ever. First, major operators are intensifying their efforts to capture incremental value from the new areas of growth: digital services, platforms and applications. Second, services beyond core are starting to generate significant revenues, making them a key component of the new operator growth story.

Our research, which is based on a rigorous and consistent analysis of the financial results of major operator groups, shows that operator revenue diversification is real and global. The average contribution of services beyond core to total revenues reached 22% in 2019 for the major operators we analysed, up from 17% in 2017. The US leads on size, China leads on growth, and Japan and South Korea lead on share. Services beyond core includes a range of B2C and B2B services, such as pay TV (traditional and over the top (OTT)), media and advertising, IoT, cloud, security, financial and lifestyle services, and solutions for vertical industries.

This report analyses how far major operators have gone beyond core telecoms, the speed of growth, and the key trends by region and service. It also provides a range of case studies (Orange, KDDI, Turkcell and Telefónica) and recommendations for operators.