Telecommunications companies should prioritize their core strengths in connectivity and data services to grow B2B sales instead of pursuing deep vertical specialisation.
Research firm GlobalData warns that while many telcos are tempted to pursue sector-specific strategies and partnerships, these moves often create unrealistic expectations and require expensive strategic course corrections.
“Over three decades of working with telcos, GlobalData has seen many ambitious statements about building up expertise in specific verticals,” said Gary Barton, Research Director for Enterprise Technology and Services at GlobalData.
“Although there are cases where telcos have succeeded in particular industries, those wins are frequently opportunistic rather than the result of deep, sustained relevance to the vertical.”
The technology landscape is becoming more complex, increasing the need for specialised solutions across sectors such as manufacturing, banking and finance, healthcare and pharmaceuticals, and transport and logistics.
That complexity can make a vertical strategy appealing, but GlobalData cautions against telcos spreading their efforts too widely.
“It’s tempting to assume that all enterprises within a vertical buy technology the same way and have identical needs, but growing numbers of sub-verticals behave very differently,” Barton explained.
“Telcos cannot realistically develop the depth of understanding required to meet all these highly nuanced demands. Attempting to do so risks shrinking the total addressable market and raising go-to-market costs as firms target ever-smaller customer groups.”
Robert Pritchard, Principal Analyst at GlobalData, noted that there are isolated examples of point solutions — for instance, IoT applications or co-developed offerings tailored to certain verticals — but these remain exceptions rather than the norm.
Rather than betting on vertical specialisation, GlobalData advises telcos to concentrate on horizontal capabilities that are universally needed, such as internet and cloud access, and secure networking services like SD-WAN and SASE.
By focusing on connectivity and data networking, telcos can position themselves as essential enablers of wider enterprise transformation as businesses adopt cloud and AI technologies.
“Telcos should demonstrate how their solutions will be the crucial enabler for an enterprise’s broader transformation journey as it embraces technologies such as cloud and AI,” Barton concluded.
(Photo by Eran Menashri)
See also: Huawei eyes Asia-Pacific growth with AI cloud services
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