To avoid becoming pure utilities, telcos must evolve their core businesses into more efficient and flexible infracos. But if they also want to accelerate growth and capture the full value of their network investments, they should strive towards building services businesses and becoming telecom techcos. We explore different pathways leading operators are taking to get there.

What could telcos become in 2030?

Previous instalments of our Telco 2030 report series highlighted the necessity for telcos to transform their business models to survive and identified key external pressures that will drive this internal transformation. STL Partners believes that traditional telcos, focused on manually-managed connectivity, will be no longer be viable by 2030 and that operators should adopt one of three models: infraco, servco or telecom techco.

Three telecom business models

Source: STL Partners

Telcos that have focused on new service innovation for over a decade are beginning to look like techcos. These operators, with consistent long-term strategies to build service businesses, have outperformed their peers in capital markets. For example, TELUS, Elisa, and KDDI have explicitly disclosed their non-connectivity revenues, whilst Deutsche Telekom has uniquely benefited from significant growth in its core US business, a rare telecoms opportunity.

Comparison of market capitalisation evolution for key telecoms operators, 2010-2024

Source: Yahoo Finance, June 2024

In this final instalment of our three-part report series, we focus on the practical steps telcos should take to build success in 2030. This report examines how telcos can become an infraco, servco, or telecom techco and includes case studies of operators making the transition.

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This report is the final of three focused on telecoms strategy and transformation

Telecoms 2030 Part 1: The telecoms industry problem

• Decline of the traditional telecoms business model:
  • Value destruction in telecoms
• Need for a new resource allocation model:
  • And a corresponding change in the operational model
• Case for functional or structural separation

Telecoms 2030 Part 2: Understanding the forces of change

• Core sources of change for telecoms operators:
  • Shifts in the macro environment
  • Changing market dynamics
  • Increasing demands from stakeholders
  • Technological disruptions
• Need for internal transformation:
  • Culture
  • People
  • Organisation structure

Table of contents

• Executive summary
• Introduction
• Becoming an infraco
• Becoming a servco
• Becoming a telecom techco
• Conclusions

Related research

• Telco generative AI adoption tracker
• Future Skills Tracker report
• Reinventing insurance: The role of telcos

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Author

Amy Cameron

Research Director

Amy works with world-leading operators and tech companies to define opportunities and strategies in the B2B and AI fields. She leads STL Partners’ research into application of AI in telecoms, as well as the Growing Enterprise Revenues research stream.