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Telecom Review will provide valuable insights on how the leading Asia Pacific telecommunications companies can excel in generating non-connectivity revenues by 2023.

As the telecom industry witnesses a paradigm shift, non-connectivity revenues have become a pivotal factor in the success of telcos. From innovative service offerings to strategic diversification, these telcos have embraced the digital era and are reaping the rewards.

Non-connectivity revenues have become a driving force behind the telecommunications industry's revenue growth, surpassing the overall industry growth rate. In 2022, these revenues accounted for 20.3% of total revenues and are projected to reach 26% by 2025 as telcos expand their digital and enterprise service offerings.

Contribution of non-connectivity revenue to total revenue, 2022 (%).

To determine the top performers in non-connectivity revenues, the study employed the Twimbit growth index, which considers various factors, including absolute non-connectivity revenue growth, the percentage change in non-connectivity revenues and non-connectivity revenues as a percentage of      total revenues in 2022.

Key Insights From Leaders of Non-Connectivity Services

Chinese telecommunications companies are at the forefront of utilizing 5G technology in various industries, with a remarkable number of over 49,000 applications. These telcos have made impressive progress in areas such as cloud computing, the Internet of Things (IoT) and big data.

As a result, they have transformed their traditional role as telecommunications providers and are now actively serving enterprise customers. Their commitment to research and development has been instrumental in their achievements, highlighting their dedication to ongoing innovation.

Top 10 telcos to ace non-connectivity revenues (NCR) in 2022.

China Mobile continues to impress with its exceptional growth and success in various sectors. Despite its massive scale, the company consistently delivers outstanding performance.

Here are some key metrics that highlight its dominance:

  • China Mobile generated the highest revenue in the Asia-Pacific region, reaching US$140.6 billion in 2022. This represents a growth rate of 10.5% year-on-year, surpassing the industry average growth rate of 6.7%.
  • The company leads the pack with the highest non-connectivity business revenue among 28 operators, amounting to US$27.4 billion. This revenue has grown at an impressive rate of 33.2%.
  • China Mobile also generated the highest revenue from its enterprise business, totaling US$ 2 billion and growing at 22.6%. This success is supported by a customer base of 23.2 million corporate clients, with a net addition of 4.3 million customers in 2022.
  • The company's cloud revenue reached US$7.5 billion, growing at an astonishing rate of 108%. China Mobile has signed over 6,200 major contracts for cloud services as of 2022.
  • By the end of 2022, China Mobile had entered into over 18,000 agreements for 5G commercial projects, generating over US$5.5 billion in revenue. Overall, China Mobile's impressive performance across these metrics solidifies its position as a dominant player in the industry.

Also read: China Mobile to Support Data Interconnect and Future 5G Services

Further, Taiwan Mobile has once again emerged as the leader in generating non-connectivity revenues, accounting for 61.2% of the total. The majority of this revenue, 59%, comes from e-commerce services, which have experienced a growth of 19%. This is a significant contribution, making up 15% of the overall earnings. To further enhance customer retention and drive growth, Taiwan Mobile plans to introduce loyalty programs for its mobile bundle users. Additionally, they have allocated a budget of US$245 million to expand its distribution centers by 2023.

Also read: Nokia and Taiwan Mobile Partners for an Efficient 5G Coverage Deal

Another versatile company, KT Corp., has successfully diversified into non-connectivity services. They offer a wide range of services for both enterprise and consumer markets, including cloud, AI, financial services, content, media, and entertainment. With 13% of its total business coming from content and media, KT Corp. is a prominent player in this segment.

Also read: Converge and KT Partner to Support Philippines’ Digital Transformation

Meanwhile, NTT Docomo operates in three main areas: enterprise, smart life and consumer communication. The smart life business is particularly important for NTT Docomo as it generates a significant amount of revenue that is not related to connectivity.

This is achieved through finance and marketing solutions. In order to enhance its marketing solutions, NTT Docomo has formed partnerships with companies from various industries and utilized data analytics. One of the ways NTT Docomo provides marketing solutions is by allowing corporate customers to post ads that are driven by data-driven solutions.

Additionally, the company has developed a new initiative that collects purchasing data from different industries. This data is then used to propose new products and initiatives to manufacturing and retail customers. NTT Docomo has a large customer base and a wide network of merchant partners, which allows it to expand its marketing support business for manufacturing and retail customers.

Also read: DOCOMO Grants Standard Essential Patent License

Globe Telecom has made significant progress in its non-connectivity sector in recent years, despite it still being in its early stages. The company has established a strong foundation for future growth driven by an ecosystem. One notable achievement for Globe is its success in the financial services industry, particularly with its GCash app, which became the leading finance app in the Philippines.

The telco GCash has an impressive user base of 76 million registered users, along with 5.8 million merchants and social sellers, and 855 GLife merchant partners. In addition to dominating the e-wallet market, GCash has expanded its services to include digital financial offerings such as credit, savings, wealth management, and insurance.

Through their various products, including revolving credit lines, cash loans, and buy-now-pay-later (BNPL) options, GCash has disbursed over ₱57 billion in loans to 2 million unique borrowers. These services are supported by their proprietary credit scoring system.

Also read: Globe Sees Better Business Growth Amid Inflation Downtrend

Finally, SoftBank is the only telecommunications company that has successfully diversified into all non-connectivity categories, making it the most diverse company in the region. Their growth strategy, known as "Beyond Carrier," aims to expand into various ICT businesses beyond the traditional telecom carrier framework. As a result of this strategy, 31.3% of SoftBank's total revenues, which amount to US$16 billion, come from non-connectivity services.

These revenues are also growing at an impressive rate of 8.4%. However, SoftBank has not fully taken advantage of the enterprise segment, unlike its competitors in the Japanese market, which have seen significant contributions from this sector.

SoftBank's media business, particularly the Line app, has been a strong part of their overall business. E-commerce has been a popular trend in the industry, but only a few telecommunications companies have been able to effectively leverage it. SoftBank is making progress in this high-growth segment.

In addition, SoftBank is making an ambitious move in the financial services segment, as shown in exhibit 10 of their ecosystem play.

Also read: Softbank Announces Q2 Results With an Upswing in Financial Activity  

The findings of the report shed light on the telecom industry's evolving landscape in the Asia-Pacific region. Telcos are strategically expanding their offerings beyond traditional connectivity services, aiming to capture opportunities and generate revenue.

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