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GSMA Intelligence is relied on by leading operators, vendors,
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For more information, please visit the GSMA corporate
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GSMA Intelligence is the definitive source of global mobile
operator data, analysis and forecasts, and publisher of
authoritative industry reports and research. Our data covers
every operator group, network and MVNO in every country
worldwide – from Afghanistan to Zimbabwe. It is the most
accurate and complete set of industry metrics available,
comprising tens of millions of individual data points, updated
daily.
GSMA Intelligence is relied on by leading operators, vendors,
regulators, financial institutions and third-party industry players,
to support strategic decision-making and long-term investment
planning. The data is used as an industry reference point and is
frequently cited by the media and by the industry itself.
Our team of analysts and experts produce regular thought-
leading research reports across a range of industry topics.
www.gsmaintelligence.com
info@gsmaintelligence.com
Authors
Pablo Iacopino, Head of Research and Commercial Content
Charu Paliwal, Team Lead
Bhawna Jain, Senior Research Analyst
3. Executive summary
Revenue diversification: tracking and assessing operator progress
1
2
3
Revenues beyond core: key trends and results
4
Operator revenues: overall performance and Covid-19 impact
5 Revenues beyond core: key findings by service
3
4. Business diversification drives growth – There is often scepticism about operator success beyond core telecoms, but our research –
based on rigorous and consistent analysis of the financial results of major operator groups – shows that operator revenue diversification
is real. The average contribution to total revenues of services beyond core (a growing and diverse range of B2B and B2C services)
reached 24% in 2020 for the operators analysed, up from 18% in 2017.
1
2
3
4
5
Shape of the market
Progress beyond core varies – Revenue beyond core as a percentage of total revenues varies significantly (around 15–40%) among
operators. This is to be expected; there is no ‘one size fits all’ in terms of strategy or timeline for diversification. Revenue diversification is
organic for the majority of operators, but M&A has provided a boost for AT&T, SoftBank and Verizon (M&A in media) as well as KT
(financial services) and SK Telecom (security). The Japanese and South Korean operators lead on diversification, but China is catching
up.
Strategically and financially more important than ever before – Revenue diversification has become a strategic focus for major
operators in recent years, with services beyond core now a key component of growth stories. The goal is twofold: to offset stagnating (or
declining) core telecoms revenues and to capture incremental value from new growth areas (such as digital services and platforms). For
two thirds of the operators analysed, services beyond core were the only source of revenue growth in 2020.
Covid-19 has proved to be a catalyst – The pandemic has accelerated the shift to digital for consumers and enterprises, fuelling further
growth beyond core. In 2020, revenue beyond core telecoms grew by double digits for half the operators analysed – a welcome outcome
considering the impact of Covid-19 on mobile roaming and equipment sales. In the enterprise market, demand for value-added services,
particularly cloud and security, grew significantly as enterprises sped up their digital transformation.
What lies ahead – There is still potential for further growth beyond core, particularly in B2B as enterprise digitisation accelerates. Cloud
and security will continue to drive B2B revenue growth. Operators are also stepping up their efforts in financial services (B2B and B2C)
across all regions, including securing new digital banking licences. In the consumer market, momentum for gaming and e-sports will likely
accelerate as 5G, cloud/edge and extended reality (XR) technologies shape the future of digital entertainment. A range of operators have
already launched local cloud gaming subscription services; others are likely to launch over the next 12 months.
4
5. The market in numbers
41%
SoftBank leads on share
In 2020, SoftBank (41%) surpassed AT&T
(37%) as the operator with the highest share of
revenue beyond core. More than half of
SoftBank’s revenue beyond core comes from
Yahoo Japan (commerce and media business).
~$200
billion
Revenue beyond core
In 2020, services beyond core (B2B and B2C)
were worth around $200 billion in revenues for
the 16 operators analysed (in aggregate) – and
are growing. Operator revenue diversification is
real.
~2×
China leads on growth
Revenue beyond core has nearly doubled over
the last three years for the three Chinese
operators in aggregate – a remarkable
achievement driven by advancements in B2B
and backed by the government’s tech agenda.
24%
Beyond core as a share of total revenues
Beyond core as a percentage of total revenues
grew for all 16 operators except AT&T in 2020
(the Covid-19 impact on WarnerMedia’s
business). The average contribution reached
24%, up from 22% in 2019 and 18% in 2017.
30%
B2B share of total revenues
Consumer is the largest contributor to revenue,
but enterprise is the main growth driver as
operators target the digital transformation of
industries. B2B as a share of total revenues
grew from an average of 27% in 2017 to 30% in
2020.
9%
Average growth beyond core
Revenue beyond core grew 9% year-on-year on
average in 2020. This was the result of 4%
growth in pay TV and 12% growth in other non-
core services. Cloud and security were the top
areas of growth in the B2B market.
5
6. 2020 in review: 10 key insights
Services beyond core were the only source of
revenue growth for two thirds of the operators
analysed, as core revenue stagnated or declined.
Operators in China, Japan and South Korea were
the most resilient during the pandemic (group
revenue grew for most of them).
Services beyond core generated two percentage
points of revenue growth on average (taking total
revenues in 2019 as the base).
Revenue beyond core is now greater than fixed
revenue for two thirds of the operators analysed – a
further signal of the shifting revenue mix.
If revenue beyond core were to represent a mobile
market, it would be the second-largest in the world
after the US – bigger than China and Europe.
1
2
3
4
5
In China, cloud revenue grew seven times faster
than IoT revenue (for the three operators in
aggregate).
Operators that had higher revenue growth beyond
core also recorded stronger performance in their
core business (non-core helps core and vice versa).
In Japan, services beyond core accounted for 90%
of total revenue growth (for the three major
operators in aggregate).
Gaming, financial services, cloud and security were
the leading areas in terms of new operator activity.
Banking and financial services became the largest
source of revenue for BT Global Services.
6
7
8
9
10
6
7. Revenue diversification: tracking and assessing operator progress
1
2
3
Revenues beyond core: key trends and results
4
Operator revenue: overall performance and Covid-19 impact
5 Revenues beyond core: key findings by service
Executive summary
7
8. Assessing operator revenue growth: how did 2020 go?
15.8
7.1
5.0 4.7 4.6 3.0 1.6 1.4
-0.4 -1.8 -2.3 -2.7 -3.3
-5.2
-7.7
-11.6
Turkcell
SoftBank
SK
Telecom
China
Telecom
China
Unicom
China
Mobile
NTT
Docomo
KDDI
América
Móvil
KT
Telenor
Verizon
Telefónica
AT&T
Singtel
Telstra Source: company figures (at group level), GSMA Intelligence
• A mixed picture. Half the operators we analysed reported revenue growth in 2020, while the other half reported revenue decreases. A closer look
reveals two trends. First, most operators in China, Japan and South Korea grew their revenues thanks to a fairly resilient core business (traditional
mobile and fixed services) and solid growth (double-digit for most) in services beyond core telecoms. Three of them (China Telecom, China
Unicom and NTT Docomo) shifted from a revenue decline in 2019 to revenue growth in 2020 – remarkable considering the challenges of the
pandemic. Second, five operators saw a deterioration in their revenue trend, shifting from revenue growth in 2019 to a revenue decline in 2020 –
largely due to the impact of the pandemic on mobile revenues. América Móvil, Telefónica and Telenor are notable examples given their large
footprints in developing markets. Turkcell continues to be an outlier (with double-digit revenue growth).
Group revenue: year-on-year change (%) in 2020*
Growth
acceleration
From decline
to growth
Growth
slowdown
• China Mobile
• SK Telecom
• SoftBank
From growth
to decline
Weakening
(stronger decline)
• KDDI
• Turkcell
• China Telecom
• China Unicom
• NTT Docomo
Comparison with previous year**
• AT&T
• Singtel
• Telstra
• América Móvil
• KT
• Telefónica
• Telenor
• Verizon
China, Japan and South Korea
*Organic figures for América Móvil, Singtel, Telefónica and Telenor. **Comparing year-on-year changes
in 2019 and 2020. 8
9. Covid-19: mid, single-digit impact on revenue
Covid-19 impact on group revenue (2020)*
Business areas most affected
• Roaming
• Prepaid mobile
• Equipment sales
• Digital advertising
• Impact of 4–5%. Of the 16 operators analysed, only
three disclosed the full impact of the Covid-19
pandemic on their 2020 group revenues. This was 4%
for Telefónica and 5% for both AT&T and Singtel. An
impact on mobile revenue was a common factor. On top
of this, Covid-19 had a significant impact on AT&T’s
WarnerMedia business due to limited and postponed
theatre and home entertainment releases, as well as
lower TV licensing, production and advertising
revenues.
• Impact on mobile across the board. This was
highlighted by most operators, including those who did
not disclose the full impact of Covid-19. Within mobile,
the business areas most affected were roaming (given
the significant decrease in international travel) and
equipment sales (due to slower handset replacement
rates, lower gross adds and disruption to the global
supply chain).
• The impact is now lessening. For example, AT&T’s
revenue has gradually recovered over the last two
quarters, returning to pre-pandemic levels across most
of its businesses. In general, the impact on international
travel and roaming remains the biggest headwind,
which will likely continue to 2022.
• Service revenues 76%
• Device sales 24%
0.6%
-3.9% -3.3%
Growth
excluding
Covid-19
impact
Covid-19
impact
Growth
including
Covid-19
impact
Impact breakdown
(% of total Covid-19 impact)
• Media and advertising 62%
• Mobile services 14%
• Mobile equipment 5%
• Pay TV 4%
• Business wireline 2%
• Other 13%
Impact breakdown
(% of total Covid-19 impact)
-0.6%
-4.6% -5.2%
-2.5%
-5.2%
-7.7%
Source: company figures (at group level), GSMA Intelligence
*As a percentage of 2019 revenue. Based on organic figures for Singtel and Telefónica.
Telefónica
Full year ended
December 2020
AT&T
Full year ended
December 2020
Singtel
Full year ended
March 2021
9
10. Services beyond core drive revenue growth during Covid-19
• Covid-19 fuelling growth beyond core. Even before the pandemic,
the trend towards digitisation was clear – but the pandemic has
accelerated the shift to digital for consumers and enterprises. For
example, the adoption of e-commerce during the peak of the
pandemic nearly doubled compared to pre-Covid-19 levels in major
countries, including the US, Canada, France, Italy, Australia, Brazil
and Mexico.* While e-commerce volumes have declined from their
Covid-19 peak (due to the re-opening of retail stores), e-commerce
as a share of total retail sales is still 30% higher than pre-Covid
levels. Mobile commerce accounts for the majority of e-commerce
transactions. In the enterprise market, demand for digital solutions
and value-added services, especially cloud and security, grew
significantly as enterprises accelerated their digital transformation.
• Media and advertising was an exception. This was the only non-
core area suffering the Covid-19 crisis at scale, due to lower content
production and digital advertising (cuts in advertising spend by
brands and advertisers). As shown on the previous page, for AT&T,
more than 60% of Covid-19-related revenue losses in 2020 came
from its WarnerMedia business.
• Fixed more resilient than mobile. Covid-19 boosted demand for
home broadband access and high-speed connectivity to support
remote working, home schooling and a surge in video consumption
and online shopping. This made fixed revenues (with average growth
of 0.9%) more resilient than mobile revenues (–1.0%).
-1.0%
0.9%
4.3%
11.5%
Mobile
Pay TV
Fixed
Other services
Core
telecoms
Beyond core
telecoms
14
9
7
7
2
6
9
9
YoY change in 2020 Number of
operators that had:
Revenue growth by category of service
revenue
growth
revenue
decline
**Simple average of year-on-year changes.
Source: company figures (at group level), GSMA Intelligence
16 operators in
aggregate**
*E-commerce as a percentage of total retail sales. 10
11. 19%
5%
20%
56%
A snapshot of the operator revenue mix
Contribution to total revenues by category of service, 2020*
Mobile
Pay TV
Fixed
Other services
Core
telecoms
Beyond
core
telecoms
Average
Source: company figures (at group level), GSMA Intelligence
• Mobile leads for most. Telstra is the
exception (with fixed revenue slightly
greater than mobile revenue). AT&T has
the most balanced mix.
• Beyond core greater than fixed for
many. Revenue generated by services
beyond core is now greater than fixed
revenue for two thirds of the operators
analysed – a further signal of the shifting
revenue mix.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SoftBank
AT&T
KT
SK
Telecom
Singtel
Turkcell
KDDI
NTT
Docomo
Telefónica
China
Telecom
Telstra
Verizon
China
Unicom
América
Móvil
Telenor
China
Mobile
*Sorted by share of beyond core (from highest to lowest). 11
12. Consumer (B2C) versus enterprise (B2B):
scale versus growth
Source: company figures (at group level), GSMA Intelligence
27%
28%
29%
30%
2017 2018 2019 2020
• Revenue disclosure for B2B services is limited. However, we were able to gather data for 11 major operator groups. Consumer services are
the largest contributor to revenue, but enterprise is the main growth driver as operators increasingly target the digital transformation of vertical
industries. B2B as a share of total revenues grew from an average of 27% in 2017 to 30% in 2020. Disclosure of B2B revenue by vertical sector is
virtually non-existent, but our Operators in Focus Enterprise Opportunity 2021 Survey shows that operators expect financial services,
manufacturing and retail to be the top verticals in terms of B2B revenue (connectivity and value-added services) through to 2025 – with variation
by region.
• A mixed picture for B2B revenue in 2020. The pandemic has increased enterprises’ need for digital transformation, which in turn has boosted
demand for digital solutions and value-added services provided by operators, especially cloud and security. At the same time, traditional B2B
sales (e.g. connectivity and equipment) have been affected by the pandemic, particularly in the SME segment. Since connectivity is greater than
non-connectivity revenue, overall B2B revenues declined in 2020 for more than half the operators analysed.
B2B as a percentage of total revenues
11 operators in aggregate (simple average)
B2B as a percentage of total revenues (2020)*
*Service revenue for Vodafone. For Telstra, B2B excludes revenue from small businesses (reported
within Consumer). Domestic figures for Turkcell (Turkey accounts for 86% of Turkcell Group revenue). 12
44% 43% 41% 35% 34% 30% 27% 19% 19% 19% 18%
56% 57% 59% 65% 66% 70% 73% 81% 81% 81% 82%
Singtel
BT/EE
SoftBank
AT&T
Telstra
Verizon
Vodafone
Telefónica
Turkcell
KDDI
China
Mobile
B2B Other (mostly Consumer)
13. Revenue diversification: tracking and assessing operator progress
1
2
3
Revenues beyond core: key trends and results
4
Operator revenue: overall performance and Covid-19 impact
5 Revenues beyond core: key findings by service
Executive summary
13
14. Core telecoms Beyond core
Enterprise
Consumer
Gaming
Traditional
pay TV
Enterprise
IoT
Cloud and edge Security
Mobile voice, messaging and data
Fixed voice and broadband
OTT video content
and services
Financial services
Advertising and
digital marketing
Big data and
analytics
Professional
services
IT
SD-WAN
Mobile voice,
messaging and data
Fixed voice and
broadband
MPLS WAN
IP-VPN
Private
networks
Leased
lines
Unified communications
and web conferencing
Digital payments
and commerce
Smart home
B2B
content and
e-sports
Revenue diversification: defining services beyond core
• A diverse range of services.
The portfolio of services beyond
core offered by operators has
never been richer. It includes a
growing and diverse range of B2B
and B2C services and products
(see chart). Gaming, financial
services, cloud and security were
the leading areas in terms of new
operator activity in 2020.
• Bundling and integration.
Services beyond core are
increasingly offered as part of
integrated solutions. For example,
cloud, IoT, analytics and security
services are often offered to
enterprise customers via digital
transformation packages. A range
of operators offer consumer
services (e.g. digital
entertainment, financial services
and commerce) via multiservice
platform-based models.
Source: GSMA Intelligence
Core telecoms services and services beyond core
Utilities
Health and
fitness
E-sports
Financial
services
14
15. Mobile
Pay TV
Fixed
Other services**
Core
telecoms
Beyond
core telecoms
• Understanding success. Operator success beyond core can be
defined and measured in different ways. Based on our discussions
with major operators, they have identified revenue generation as the
primary measure of success, which we strongly agree with. To
assess operator progress beyond core, we look at the financial
results of major groups around the world. However, not all report
sufficient data to calculate revenues beyond core.* We were able to
gather and compare revenues beyond core for 16 major operator
groups. These generated a total of around $850 billion in revenue
(core and beyond core) in 2020. We examined group figures for the
last four years (2017, 2018, 2019 and 2020). Annual figures are
based on fiscal-year reporting periods.
• Revenue disclosure beyond core is improving. This is to be
expected, given the importance of these services. Operators are
reporting more data points, though there is still significant
fragmentation. The Chinese operators are setting a new bar,
providing increasing visibility of revenues (and other KPIs) generated
by individual services.
• Making data more comparable. Revenue beyond core is calculated
based on data as reported by operators and GSMA Intelligence
reclassifications and estimates (where applicable and appropriate).
These adjustments allow a better like-for-like comparison as in some
cases reported data is inconsistent between operators.
Methodology: tracking operator progress beyond core
*For example, Etisalat, Deutsche Telekom, Ooredoo, Orange, Telecom Italia and Vodafone. **A range of B2C and B2B services, such as pay TV
(traditional and over the top), media and advertising, gaming, IoT, cloud, security, commerce and financial services, smart home services, and solutions for
vertical industries.
Revenue categories
Operator coverage: 16 major groups
América Móvil
China Unicom
Singtel
Telenor
AT&T
KDDI
SK Telecom
Telstra
China Mobile
KT
SoftBank
Turkcell
China Telecom
NTT Docomo
Telefónica
Verizon
Source: GSMA Intelligence 15
16. Revenue diversification: tracking and assessing operator progress
1
2
3
Revenues beyond core: key trends and results
4
Operator revenue: overall performance and Covid-19 impact
5 Revenues beyond core: key findings by service
Executive summary
16
17. • Progress varies. Revenue beyond core as a
percentage of total revenues varies significantly (around
15–40%) among operators. This is expected as there is
no ‘one size fits all’ in terms of strategy and timeline for
diversification. Some operators offer a wider range of
consumer services beyond core; Turkcell and the
Japanese and Korean operators are notable examples.
• M&A is also a factor. Diversification is organic for the
majority of operators, but M&A has provided a boost for
AT&T, SoftBank and Verizon (in media) as well as KT
(financial services) and SK Telecom (security). AT&T is
now scaling back (with the WarnerMedia spin-off deal
with Discovery Inc) to focus on the new B2B and B2C
opportunities enabled by the rollout of 5G and fibre
networks. This does not sound a ‘death knell’ for
operators in media though; rather, it reflects the
challenges of full telco/media integration at scale.
• Understanding progress. The average contribution of
revenue beyond core to total revenues reached 24% in
2020, up from 22% in 2019. Mathematically, two factors
determine its progression: the performances on core
and beyond core. While core revenue declined for 10 of
the 16 operators analysed, the 2 percentage point
increase was mostly driven by further progress on
services beyond core.
Services beyond core: how far operators have gone
41%
37%
35%
31%
27% 27%
25%
22% 22% 22%
19% 19%
17%
14% 14% 12%
SoftBank
AT&T
KT
SK
Telecom
Singtel
Turkcell
KDDI
NTT
Docomo
Telefónica
China
Telecom
Telstra
Verizon
China
Unicom
América
Móvil
Telenor
China
Mobile
Average: 24%
Revenue beyond core as a percentage of total revenues in 2020
Source: company figures (at group level), GSMA Intelligence
17
18. 41%
37%
35%
31%
27% 27%
25%
22% 22% 22%
19% 19%
17%
14% 14% 12%
SoftBank
AT&T
KT
SK
Telecom
Singtel
Turkcell
KDDI
NTT
Docomo
Telefónica
China
Telecom
Telstra
Verizon
China
Unicom
América
Móvil
Telenor
China
Mobile
3
-3
2 2 1 1 1 1 3 2 2 1
4
1 1 3
Assessing progress in 2020
• Progress across the board. Revenue beyond core as
a percentage of total revenues grew for all operators
except AT&T in 2020. Revenue growth beyond core
was organic for all in 2020. The Chinese operators had
some of the largest year-on-year increases, mostly
driven by B2B services and backed by the
government’s ambition to make China a leading
country in high-tech industries, including 5G and AI.
• SoftBank took the lead on revenue diversification.
In 2020, SoftBank surpassed AT&T. This was the
result of two main factors: 15% growth of Yahoo
Japan’s revenue (mostly driven by the commerce
business) and a significant revenue decrease in
AT&T’s media and entertainment businesses (–11% for
domestic pay TV and –9% for WarnerMedia).
• Explaining China Mobile. The Chinese operator is
making significant progress on services beyond core.
For such services, it has the fourth-largest business
($14 billion in revenue in 2020) after AT&T, Verizon
and SoftBank, and the highest revenue growth (more
than 30% year-on-year). However, its beyond core
share of total revenues stands at 12% – the lowest
among the operators analysed. This is the result of
having a large mobile business (around $80 billion in
revenue) which dominates its revenue mix.
Revenue beyond core as a percentage of total revenues in 2020 and year-on-year
change (percentage points)
Source: company figures (at group level), GSMA Intelligence
18
19. 15%
28%
30%
21%
23% 24%
20% 19%
14%
16% 15% 16%
7%
12%
14%
6%
41%
37%
35%
31%
27% 27%
25%
22% 22% 22%
19% 19%
17%
14% 14%
12%
SoftBank
AT&T
KT
SK
Telecom
Singtel
Turkcell
KDDI
NTT
Docomo
Telefónica
China
Telecom
Telstra
Verizon
China
Unicom
América
Móvil
Telenor
China
Mobile
Assessing progress over the previous three years
• Material progress between 2017 and 2020.
Revenue beyond core as a percentage of
total revenues grew 6 percentage points on
average across the 16 operators analysed
during this time period (from 18% in 2017 to
24% in 2020). Some operators had double-
digit (or near-double-digit) increases as
organic growth was complemented by
acquisitions (AT&T and SoftBank are the
primary examples).
• China is catching up. Services beyond core
generated $33 billion in revenue in 2020 for
the three Chinese operators in aggregate,
up from $18 billion in 2017. Services beyond
core have been the main driver of overall
revenue growth for the Chinese operators,
due to flat core telecoms revenue
• Explaining Telenor. Revenue beyond core
as a percentage of total revenues was 14%
in 2020 – as high as in 2017. However, this
reflects the sale of its Canal Digital
operations. Excluding M&A, the ratio would
have increased by 2 percentage points.
Source: company figures (at group level), GSMA Intelligence
2020
2017
Revenue beyond core as a percentage of total revenues in 2020 and 2017
19
20. AT&T
Singtel
Telenor
KT
Verizon
Telstra
KDDI
América Móvil
NTT Docomo
Telefónica
SK Telecom
China Telecom
SoftBank
Turkcell
China Unicom
China Mobile
Core revenue Total revenue
Revenue beyond core
Year-on-year revenue growth by category, 2020
• Only source of revenue growth. In
2020, services beyond core were the
only source of revenue growth for
two thirds of the operators analysed,
as core revenue stagnated or
declined for many.
• Generating 2 pp of growth.
Services beyond core generated 2
percentage points of revenue growth
on average in 2020 (taking 2019 total
revenue as the base). However, in
several cases, this was not enough
to offset declines in core revenues.
• Mutual benefits. Operators that had
higher revenue growth beyond core
also had stronger performances in
their core businesses. This means
services beyond core help core
services (churn reduction, ARPU
uplift and data usage growth) and
vice versa (leveraging operator brand
and key core assets such as
distribution, networks and customer
relationships).
Measuring the speed of growth
Source: company figures (at group level), GSMA Intelligence
-13%
-15% -12%
34%
14% 16%
20
21. Mapping operator success beyond core: size, share and growth
Revenue beyond core, year-on-year growth and as a percentage of total revenue, 2020
US leads on size. AT&T is the big
outlier in terms of size of revenue
beyond core ($63 billion in 2020),
followed by Verizon ($25 billion).
For both, media and entertainment
is the key driver.
Japan and South Korea lead on
share. Operators in Japan and
South Korea lead on revenue
diversification, especially in the
consumer market.
China leads on growth. Chinese
operators are seeing the most
growth, driven by cloud and other
value-added services for enterprise
customers (B2B).
Turkcell is a benchmark. With
high diversification and growth,
Turkcell provides one of the
broadest portfolios of consumer
digital services.
Bubble sizes represent relative size of
revenue from services beyond core Source: company figures (at group level), GSMA Intelligence
Telefónica
Telstra
China Unicom
KT
Turkcell
NTT Docomo SK Telecom
Verizon
China Telecom
Singtel
Telenor
América Móvil
KDDI
AT&T
China Mobile
Softbank
-20%
-10%
0%
10%
20%
30%
40%
10% 15% 20% 25% 30% 35% 40% 45%
Revenue
beyond
core
(yoy
growth)
Revenue beyond core (as % of total revenue)
Average
contribution: 24%
Average
growth: 9%
21
SoftBank
22. US Latin America Europe
China Japan and South Korea Rest of Asia Pacific
• Cord cutting continues. Pay-TV household
penetration declined by a further 5 pp in 2020,
while video streaming subscriber growth
benefitted from the Covid-19 pandemic.
• Shifting media strategies. With AT&T scaling
back on content, much of the operator’s media
focus will be on spurring developments in
gaming, immersive reality, e-sports and live
events through 5G, cloud, edge and XR
capabilities and partnerships.
• Pay TV under pressure. América Móvil had
another tough year in 2020 (pay-TV revenue
down 7% year-on-year, subscribers down 4%).
OTT is on the rise: HBO Max launched in 39
territories in Latin America and the Caribbean.
• Stepping up fintech efforts. Operators are
expanding in digital payments (e.g. Vivo Pay
and Claro Pay) and consumer loans (e.g.
Movistar Money in Mexico and Colombia).
• Leading region on FMC. FMC continues to be
a key strategic pillar for most operators with
large footprints, including Vodafone, Deutsche
Telekom, Orange and Telefónica. FMC M&A
continues as operators advance their 5G and
fibre rollouts.
• Gaming on the rise. A range of operators have
launched their own gaming subscription services
(often part of their 5G propositions) to capitalise
on the shift of gaming to mobile.
• 5G SA for B2B. China is the only country to
have had 5G SA network deployments from all
operators in the market. With 5G a national
strategic priority, operators are capturing new
B2B opportunities, combining 5G with AI and
cloud/edge technologies.
• Smart home on the rise. All three operators
are making progress. Smart home revenue
accounted for 2% of total revenues in 2020 for
both China Mobile and China Unicom – and is
growing.
• South Korea leads on 5G for consumer.
Korean operators are a benchmark for
consumer services beyond connectivity (e.g.
content, finance and lifestyle). Leading on 5G
(27% of mobile connections in June 2021) adds
new possibilities. Gaming is a key focus.
• Japan leads on integration of telecoms and
lifestyle services. KDDI’s Life Design and NTT
Docomo’s Smart Life (both focused on non-core
consumer services) continue to deliver double-
digit revenue growth.
• New interest in digital banking licences.
Singtel is making new moves in financial
services. It won a digital banking licence in
Singapore and has applied for one in Malaysia.
Changing banking regulations are opening up
the market to new players.
• Partnerships to scale IoT. A range of
operators (e.g. Telstra, Smart Axiata, Dtac,
Reliance Jio) are co-creating solutions with
enterprises and building partnerships to reach
new IoT customers and markets.
Services beyond core: regional trends
22
23. Revenue diversification: tracking and assessing operator progress
1
2
3
Revenues beyond core: key trends and results
4
Operator revenue: overall performance and Covid-19 impact
5 Revenues beyond core: key findings by service
Executive summary
23
24. The global aggregate of revenue beyond core
• Progress beyond core continues. The average contribution to total revenues of services beyond core reached 24% in 2020, up from 22% in 2019
and 18% in 2017. This makes operator revenue diversification real for major operators.
• Around $200 billion. In 2020, services beyond core (B2B and B2C) were worth around $200 billion in revenue for the 16 operators analysed (in
aggregate). Other operators not included in our coverage (many do not report sufficient data to calculate their revenues beyond core) generate
revenues beyond core too. This means the total revenue beyond core is higher than $200 billion globally – and growing. To put this in context, if
revenue beyond core were to represent a mobile market, it would be the second largest in the world after the US – bigger than China and Europe.
Note: For NTT Docomo, Singtel and Turkcell, pay-TV revenue is low on a relative basis, hence not visible.
Source: company figures (at group level), GSMA Intelligence
18%
20%
22%
24%
2017 2018 2019 2020
$63
AT&T
$0
$5
$10
$15
$20
$25
Verizon
SoftBank
China
Mobile
KDDI
China
Telecom
Telefónica
NTT
Docomo
China
Unicom
KT
América
Móvil
SK
Telecom
Telstra
Singtel
Telenor
Turkcell
Pay TV Other services
Revenue beyond core: $202 billion in
2020 (sum of 16 operators analysed)
• Pay TV: ~$50 billion
• Other services: ~$150 billion
Revenue beyond core as a percentage
of total revenues
16 operators in aggregate (simple average)
Revenue beyond core breakdown, 2020 ($ billion)
24
25. 5%
19%
6% 5%
16%
14%
4%
3%
7%
4%
1%
3% 2% 1% 1% 1% 1% 1% 1% 1% 1%
Average
of
16
operators
AT&T
SoftBank
Verizon
SoftBank
KT
SK
Telecom
Turkcell
SK
Telecom
Singtel
Telefónica
China
Telecom
Telefónica
China
Unicom
China
Mobile
Telstra
China
Unicom
China
Mobile
Telstra
Telefónica
China
Telecom
Services beyond core: contribution to total revenues, 2020*
Media and
advertising
Financial services
and commerce
Security Cloud IoT
Pay TV
Breaking down the contribution of individual services
• Gaining insights from individual services. In 2020, pay TV as a percentage of total revenues was in the single digits for all operators but KT
(10%) and AT&T (17%, because of its large pay-TV customer base in the US). The average was 5%. Revenue disclosure for other individual
services is irregular and in some cases inconsistent. However, a range of data points provided by some operators reveals important trends: cloud
revenue has surpassed (or is on a trajectory to surpass) IoT revenue; SoftBank and KT lead on financial services and commerce (as a percentage
of total revenues); and M&A has been a key factor in lifting contributions of individual services to mid-single or even double digits (e.g. AT&T,
SoftBank and Verizon in media, SK Telecom in security, and SoftBank and KT in financial services and commerce).
Source: company figures (at group level), GSMA Intelligence
*Operators reporting revenue figures for individual services
25
26. Pay TV: taking a growing share in a low-growth market
• The closest adjacent service to telecoms but under pressure.
Pay TV is an integral part of operator household propositions, with
many operators bundling pay TV with fixed and, increasingly, mobile
services (quad play). Operators are taking a growing share of the
global traditional pay-TV market, but the market is growing slowly and
even declining in some countries as consumers adopt video
streaming (OTT) services. The US is the most notable case of
declining pay-TV connections due to cord cutting.
• IPTV continues to win market share. Over the last decade, IPTV’s
share of traditional pay-TV connections has grown significantly,
powered by VDSL and FTTH technologies provided by operators.
Cable and to a lesser extent satellite are the losers. Bundling is also a
key driver. IPTV is now the largest technology by connections in the
leading fixed-mobile convergence (FMC) markets. IPTV will surpass
satellite by number of connections by 2025.
• Mixed picture for pay-TV revenue in 2020. While the pandemic
accelerated video streaming subscriber growth, the impact on
traditional pay TV was mixed. More than half the operators analysed
reported pay-TV revenue growth in 2020, while the others reported a
revenue decline. South Korean operators performed strongly,
especially SK Telecom (26% revenue growth led by IPTV subscriber
growth). Both AT&T (–14%) and América Móvil (–7%) had significant
declines in their pay-TV revenues due to subscriber losses and
ARPU contraction.
53%
44%
40% 38%
9%
18%
27%
33%
34% 35%
31%
28%
2010 2015 2020 2025
Cable IPTV Satellite Other
Traditional pay-TV technologies: share of total connections*
76% 66% 60% 57% 56% 52% 51% 46% 37%
23% 22% 15% 13% 12% 7%
IPTV share of traditional pay-TV connections (2020)**
*Across 36 of the world’s largest pay-TV markets. Simple average. **Selected markets Source: GSMA Intelligence 26
27. Gaming: the latest, promising addition to B2C services
• Seeking a more direct role. So far, operators have mostly benefited
from gaming indirectly through upselling, as heavy gamers need larger
mobile data allowances. However, the shift of gaming consumption
from consoles to mobile devices combined with the rise of cloud-based
gaming and technology innovation that heavily involves (or is led by)
operators (e.g. cloud, edge, 5G) is driving new thinking. 5G plays a
role. First, streaming requires cloud-based content access, delivery
and consumption, which in turn requires high-speed connectivity and
low latencies. Second, 5G users are more engaged with gaming than
4G users (twice as much) and are more interested in having gaming
bundled with their mobile connectivity contracts (40% higher interest).*
• Operators have four possible routes (see chart). These routes are
not mutually exclusive – a complete gaming strategy may well involve a
combination of the options. As with music and video streaming in the
past, a subscription model is now emerging for gaming. 15% of gamers
already have a gaming subscription; half of gamers are not interested
in a gaming subscription; that leaves a potential incremental market of
at least 35% of gamers.* To capture this opportunity, a range of
operators have launched their own, local cloud gaming propositions,
including Deutsche Telekom, TIM, Vodafone Italy, Turkcell, China
Mobile, Singtel and the three South Korean operators. We estimate
that in 2025 gaming subscriptions could generate 4% of new revenues
for operators in South Korea, and 3% in the UK, Italy and the US.
Operator engagement in the ‘metaverse’ is also emerging through
partnerships and developments in technology and content.
Operator routes to gaming: comparison on selected metrics
Selling
third-party
gaming
services
(bundled with
mobile)
Developing
own gaming
services
(own-
branded)
B2B only:
tech partner
for gaming
and media
companies
Developing
e-sports for
network and
pay-TV
benefits
Time to
market
Low Medium/
high
Medium Medium
Gaming
expertise
required
Low Medium/
high
Medium Medium/
high
Monetisation Low Medium Medium Medium
KT and SK Telecom each aim to
reach 1 million gaming subscribers
over the next 2–3 years; this would
correspond to around 10% of their 5G
subscriber bases (assuming most
gaming subscribers will be 5G users).
B2C-focused B2B-focused
Source: company figures, GSMA Intelligence
China Mobile had 52 million
cloud gaming subscribers at the
end of 2020 (a three-fold
increase year-on-year). 52
million represents 5% of its
mobile customer base.
*GSMA Intelligence Consumers in Focus Survey (20 major countries around the world).
Developing their own gaming services
27
28. Financial services: stepping up efforts
• A key focus. Financial services represent a key component of
revenue diversification strategies for various operators. For
SoftBank and KT, financial services and commerce represent
the largest business beyond core telecoms, accounting for 16%
and 14% of their total revenues respectively. As of June 2021,
Orange Bank had 1.6 million B2B and B2C customers in
Europe, while Orange Money reached 23 million active
customers across Africa and the Middle East.
• Latest developments highlight three trends. First, some
operators including Orange and Telefónica are targeting new
customer segments (SOHO and SME) following an initial focus
on consumers. Second, the portfolio of offerings is expanding
to insurance and digital currencies for some operators – it is no
coincidence that Orange Bank was renamed Mobile Financial
Services, to reflect the integration of new activities. Third,
operators are winning new digital bank licences as changing
bank regulations are opening up the market.
• Stepping up efforts. As Covid-19 has accelerated the shift to
digital, a growing number of operators around the world are
making new moves in financial services through M&A and
partnerships. Such moves target both customer engagement
and new digital capabilities for businesses, including for fraud
prevention, credit risk, identity and digital currencies.
• Orange acquired Anytime, a neobank focused
on financial services for independent
professionals and small businesses.
Operators in financial services: examples of recent M&A and partnerships
• Singtel won a digital banking licence in
Singapore with its partner Grab. It also applied
for one in Malaysia through its joint venture with
Grab, together with other investors.
• Verizon and Mastercard are partnering to bring
5G to the global payments and commerce
industry across a range of use cases (e.g.
contactless shopping, autonomous checkout
technology, cloud point-of-sale solutions).
• Telefónica launched Vivo Pay in Brazil, which
complements Vivo Money (consumer credit
offering). It is also partnering to launch Movistar
Money (a consumer credit service) in Colombia
(JV with BBVA) and Mexico (partnership with
Banco Sabadell).
Verizon
Telefónica
Orange Singtel
• SoftBank is merging its PayPay service with
Line Pay (a payment service offered by
messaging service company Line Corp). The
two payment services have a combined 75
million users.
SoftBank
• Jio has integrated its services with WhatsApp,
offering recharging and payments solutions to
its customers.
Reliance Jio
• STC Pay will be transformed into a digital bank
after acquiring a digital banking licence in Saudi
Arabia. Also, in 2020, STC Pay received around
$200 million in investment from Western Union
(implying a $1.2 billion valuation for STC Pay).
STC
• KT issued $2 billion in digital currency after
striking partnerships with several city
municipalities.
KT
• VodaPay Super App, developed in partnership
with Alipay, continues to gain traction in South
Africa. More than 70 businesses have already
signed up or have committed to build their own
Mini Programs in the Super App.
Vodacom
Source: company announcements
28
29. Cloud and security are the top areas of growth in B2B
• Security wins. The pandemic resulted in growing demand for B2B value-added
services provided by operators as enterprises pushed forward their digital
transformation. According to our Operators in Focus Enterprise Opportunity
Survey 2021, security saw the strongest growth in demand from enterprises
due to the pandemic; it was highlighted as the primary growth area by 44% of
operators surveyed (and more than 50% in North America and the Middle East
and North Africa).
• Revenue growth in security is in double digits. Most major operators
provide security services to their enterprise customers. To boost their presence,
some, such as AT&T, Telefónica, Orange and SK Telecom, have acquired
security companies in recent years. However, few operators report their
security revenues. Importantly, Telefónica and SK Telecom reported double-
digit revenue growth in 2020. The contribution of security to total revenues is
still low but is relatively high for SK Telecom (7%), boosted by the acquisition of
ADT Caps and SK infosec, in 2019.
• China leads on cloud revenue growth. Cloud revenue more than doubled
year-on-year in 2020 for the three Chinese operators in aggregate, reaching
$3.5 billion. Alibaba Cloud – China’s largest provider of public cloud services –
had $9 billion revenue in 2020 (30% growth), meaning operators are capturing a
growing share of the cloud market. Some 24% of the operator incremental
revenue beyond core in China in 2020 came from cloud services. Globally, as
operators advance the use of cloud technologies in their networks (a priority for
72% of operators according to our Operators in Focus Network Transformation
Survey 2021), cloud offerings for enterprise customers will continue to grow.
Strongest growth in demand from enterprises due to
Covid-19 pandemic
Percentage of operators surveyed (global; N=100)
2%
6%
8%
11%
29%
44%
Private wireless networks (4G/5G)
SD-WAN services
IoT solutions & services
5G connectivity to businesses
Cloud infrastructure & solutions
Security
Source: GSMA Intelligence Operators in Focus
Enterprise Opportunity Survey 2021
29