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Why CSPs Should be All-In on the B2B Market

Why CSPs Should be All-In on the B2B Market

October 19, 2021

A new report from TM Forum – and sponsored by VoltDB – delves into the B2B market opportunity for CSPs, tapping into an extensive survey of 205 people working inside 82 CSPs worldwide. Respondents included C-level executives, architects and engineers in IT and network departments, leaders of enterprise lines of business, and consultants.

As next-generation technologies continue to mature, communications service providers (CSPs) are eager to tap into lucrative new revenue streams made possible by 5G, IoT, edge computing, and AI. CSPs have been forced to navigate declining core connectivity and network businesses in recent years and are increasingly finding more value in B2B relationships. With revenue from traditional B2B products such as voice and data services starting to wane, CSPs are looking to areas such as security, IoT, and cloud. 

What’s driving CSP optimism about the B2B market?

According to the report, CSPs are largely optimistic about their future B2B prospects. More than half of survey respondents said they expect their B2B portfolios to increase more than 6% annually over the next five years compared to 40 percent of CSPs that share the same opinion about their B2C prospects.

This optimism is primarily driven by four key factors:

1. Digital transformation

As CSPs accelerate their digital transformation efforts and digitize an ever-increasing amount of manual and legacy processes, they’re able to take advantage of a slew of new technologies — such as AI, quantum computing, IoT, 5G, and smart manufacturing. As such, they’re able to operate faster, smarter, and more efficiently than ever before, improving margins while strengthening their offerings.

2. 5G 

87 percent of survey respondents said 5G is either “crucial” or “important” for driving growth in its enterprise lines of business. As 5G deployments become more ubiquitous, CSPs are poised to unveil a number of new products for enterprise customers. These include network slicing, which enables operators to divide their networks into dedicated “portions,” each of which can be used for a different application (e.g., mobile broadband and IoT), and edge computing, which brings compute closer to end users, speeding up the decisioning process.

3. IoT

While the buzz around IoT has quieted down in recent years, many CSPs still believe that IoT will take center stage at some point in the future, especially with B2B applications that fall into the ‘Industrial’ IoT (IIoT) category. Thanks to the lightning-fast connectivity and edge computing capabilities that 5G promises, well-positioned CSPs will be able to capitalize on the growth of IoT, which, according to Cisco, will result in 3x more connected devices than people by 2023.

4. New lines of business 

While in many cases it remains to be seen exactly how CSPs will monetize leading-edge technologies, many organizations believe that there will be tremendous opportunities to roll out new products within IoT, security, and cloud.

What are the B2B market challenges for CSPs?

While the B2B market opportunity is certainly there, and exciting, for CSPs, it also comes with certain challenges. 

For starters, CSPs anticipate a steady decline in voice revenue. At the same time, they’re also seeing stagnating broadband connectivity revenue as businesses embrace SD-WAN technology over the more traditional MPLS services. 

There are also timelines to consider. Just because new technologies are on the market doesn’t mean every business will invest in them immediately. After all, many organizations struggled to stay afloat during the pandemic. As the world tries to put COVID-19 in the rearview mirror, some businesses will undoubtedly remain more cautious than others, perhaps pushing investments into the future.

While these challenges are no doubt difficult to navigate, CSPs that take a proactive stance to digital transformation, 5G, IoT, and edge computing will be much better positioned to win in the future, as each of these technologies becomes more of a de facto standard and less of a shiny new thing. 

Why it’s decision-time for CSPs

All these things considered, CSPs find themselves at a crossroads. Decisions they make today will likely echo throughout the next decade and beyond. By making smart investments in infrastructure and tech stacks, CSPs can prepare for an even faster, more data-driven future while overcoming the challenges they currently face.

Download the report to find out:

  • Which B2B services have the most potential
  • Why security solutions are particularly attractive for CSPs
  • The state of the IoT services market
  • Why cloud services could be particularly profitable for CSPs
  • The importance of rethinking go-to-market strategies in this new era
  • What CSPs can do to make the most of these new opportunities

And much more. 

Read our TM Forum report Mapping a Path to Telco Revenue Growth to learn more about the current landscape CSPs are operating in.

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