As organizations rush to embrace AI, virtualization, cybersecurity advances and industry-specific solutions such as smart manufacturing, telecommunications providers suddenly find themselves in a somewhat strategic and strong position, argue McKinsey analysts. “After a prolonged period of disruption spurred by new technologies, new competitors, rapidly evolving customer demands and dwindling opportunities in the B2C space, the telecom industry is now in a position to catalyze rapid B2B growth,” said the research firm in a recent report from its Technology, Media & Telecommunications practice. This is partly due to the key role connectivity plays in bringing the aforementioned digital and transformation plans to life. Aggregated global bandwidth demand tripled between 2019 and 2023, said McKinsey, and is expected to continue growing. As organizations venture further into AI adoption, McKinsey surveys show that respondents expect to spend 2.5 to 3.5 percent more this year than last year on legacy connectivity services and 6 percent more year-over-year on “next-gen” connectivity services such as 5G and SD-WAN. Also at issue is the even larger opportunity around “accessorizing access sales,” or what McKinsey calls the “information and communications technology” (ICT) play, whereby operators leverage their customer relationships by coupling connectivity with value-added products and services in areas such as cloud infrastructure, IT managed services and cybersecurity. According to McKinsey’s recent survey of IT decision makers, more than half of companies planned to increase telecommunications and technology spending this year, and 80 percent of these decision makers see telecom operators as viable partners for products and services beyond core connectivity. And while ICT already is driving growth for some telcos, the telecom industry overall accounts for just 12 percent of the ICT market. “As organizations demand faster connections, lower latency, more comprehensive security and a deeper understanding of the benefits that advanced connectivity can bring, telcos can lead B2B customers into the future while reducing their own reliance on legacy revenue streams,” said McKinsey. Not that things will be easy. Providers of telecom services will continue to wrestle with the decline of traditional value pools, such as voice and MPLS, while competition from hyperscalers and other non-telco players remains intense, as a quarter of decision makers said they would consider moving business away from telcos if viable alternatives materialized. Winners will be the contestants that position themselves as mission-critical partners, complete with knowledgeable sales teams that are highly attuned to customer needs, the ability to illustrate the value of solutions rather than the technical superiority of products, and marketing campaigns centered around specific customer needs and pain points. “To stay relevant, operators will need to prove they are not simply resellers but true integration partners providing end-to-end solutions – an important aspect of the value proposition, according to 55 percent of decision makers,” said the research firm. It’s the old “consultative versus transactional sales” approach. And while it may not be newest advice, McKinsey analysts still see it as some of the most salient advice for service providers. A Good Time to Know Telecom LETTER Martin Vilaboy Editor-in-Chief martin@bekabusinessmedia.com Gerald Baldino Contributing Editor gerald@bekabusinessmedia.com Tony Jones Contributing Editor tony@bekabusinessmedia.com Percy Zamora Art Director percy@bekabusinessmedia.com Jen Vilaboy Ad Production Director jen@bekabusinessmedia.com Berge Kaprelian Group Publisher berge@bekabusinessmedia.com (480) 503-0770 Beka Business Media Berge Kaprelian President and CEO Corporate Headquarters 10115 E Bell Road, Suite 107 - #517 Scottsdale, Arizona 85260 Voice: 480.503.0770 Email: berge@bekabusinessmedia.com © 2025 Beka Business Media, All rights reserved. Reproduction in whole or in any form or medium without express written permission of Beka Business Media is prohibited. ChannelVision and the ChannelVision logo are trademarks of Beka Business Media 6 CHANNELVISION | SUMMER 2025
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