Across Asia, telecom operators are confronting a familiar challenge: demand for data keeps rising, yet the traditional business model that once supported voice, messaging, and mobile plans no longer delivers steady growth.
Voice and SMS have dwindled as primary revenue sources, while data is increasingly treated as a utility. Networks carry far more traffic each year, but revenue frequently lags behind usage. In many markets, average revenue per user (ARPU) has remained flat or risen only marginally. That gap has left operators with limited options for growth beyond cutting prices.
The resulting pressure is prompting a strategic shift. Rather than relying solely on connectivity, many telecom companies are expanding into cloud services, artificial intelligence (AI), digital platforms, and enterprise technology. This transition is not just rebranding: it reflects a search for revenue streams that scale more sustainably than consumer mobile plans.
Why the traditional model is under strain
For decades, telecom growth was driven by scale: more subscribers meant more calls, texts, and data plans. That direct link has weakened as messaging apps replaced SMS, voice moved to over-the-top (OTT) services, and operators bundled or discounted data to stay competitive.
Meanwhile, network costs have continued to rise. Operators invested heavily in spectrum, fiber and radio access networks, and 5G rollouts, but monetizing those investments has become increasingly difficult. The result is an industry where traffic often grows faster than revenue.
At the same time, advances in technology have opened new opportunities. Cloud computing, AI, analytics, and edge infrastructure are now core to how businesses operate. These tools integrate directly with enterprise systems and, when deployed well, can yield higher margins than traditional consumer offerings.
In the Asia-Pacific region, this pivot is already visible. Research firm Twimbit estimated that enterprise services made up about 23.1% of total telecom revenue in 2024, up from 22.2% the year before. The change is incremental, but it underscores a clear strategic direction.
Different paths for Asia telecom operators, shared pressure
Indian operators are reducing reliance on consumer pricing by expanding into enterprise technology. Bharti Airtel, for example, has developed cloud and AI-enabled platforms for businesses and other carriers, delivering infrastructure and tools that help enterprises manage data and operations locally.
This strategy aligns with India’s expanding cloud market, which was valued at roughly USD 8.3 billion in 2023 and is expected to grow rapidly. For Indian carriers, enterprise technology offers access to larger, more stable contracts than consumer mobile plans typically provide.
Southeast Asian operators have taken different routes. Singtel, through its NCS Group, has spent years building capabilities beyond core connectivity. NCS now provides cloud, cybersecurity, analytics, and IT services to governments and enterprises across the region, positioning Singtel as a technology integrator rather than purely a network provider.
In the Philippines, Globe Telecom has built a substantial digital business around payments and financial services. GCash evolved from a mobile wallet into a broad consumer platform that includes payments, savings, lending, and everyday services. Its parent company, Mynt, is valued at about USD 5 billion, illustrating how digital platforms can create value where voice and data no longer suffice.
AI moves from experiment to operations
Operators across Asia are deploying AI to solve operational challenges and improve service quality. In Indonesia, Indosat Ooredoo Hutchison uses AI to forecast demand, manage capacity, and accelerate fault response, helping the network stay stable during peak periods.
These AI systems support broader efforts to enhance reliability while managing network complexity. Indosat has partnered with technology firms like NVIDIA and Accenture to build AI infrastructure that leverages local data, computing resources, and talent.
South Korea offers another model: operators there are embedding AI into their core strategies. SK Telecom has prioritised data centres and AI services for domestic and international markets while shedding non-core assets to sharpen its focus. KT Corporation has broadened into cloud computing, AI analytics, media, and enterprise platforms that serve healthcare, smart cities, and manufacturing. LG U+ is partnering with global cloud providers to deliver AI-driven enterprise services tailored to local needs.
China shows what scale makes possible
China’s telecom sector demonstrates how rapidly this transition can accelerate at scale. The country’s largest operators have scaled digital businesses in cloud, data, AI, and vertical-specific platforms.
China Mobile reported that digital services accounted for 29.4% of its service revenue in 2023, up more than 22% year on year. In 2024, the company reported operating revenue of CNY 1.04 trillion—growth increasingly driven by technology services rather than connectivity alone.
The limits of the shift for Asia telecom operators
Despite opportunities, carriers face significant competition from hyperscalers that dominate cloud and AI markets. To mitigate that risk, partnerships between telecoms, cloud providers, AI firms, and startups have become common across the region. These alliances let operators combine network reach with software capability while limiting investment risk.
Partnerships enable faster service development, but they also raise questions about long-term control and margin sustainability. Relying on external providers can constrain how much value operators capture over time.
What is clear is that connectivity alone no longer guarantees growth. Telecom networks remain essential infrastructure, but their role is evolving from pure connectivity providers to platforms for digital services. Operators that successfully convert their networks into platforms for cloud, AI, and enterprise solutions are better placed to stay relevant as Asia’s economies continue to digitise.
The line between telecom companies and technology firms is not vanishing overnight, but in many parts of Asia it is already becoming harder to draw.
(Photo by Luan de Oliveira Silva)