Beyond Connectivity: The Mandatory Shift to Enterprise Revenue

Beyond Connectivity: The Mandatory Shift to Enterprise Revenue

Executive Summary:

• Consumer connectivity no longer drives growth; core B2C revenues have flatlined, and traditional business models are structurally broken.

• A massive $400 billion enterprise (B2B) market has emerged, driven by accelerating demand for low-latency, localized edge computing applications like real-time AI and gaming.

• Growth now comes from platforms and services, not access alone; telcos must move up the stack to avoid being relegated to low-margin utility providers.

• By deploying a monetization layer like Swarmio Core, telcos can convert their dormant, underutilized infrastructure into high-margin, revenue-ready edge cloud products in weeks, not years.

1. The Strategic Crossroad: The End of the Connectivity Monopoly

The global telecommunications industry is navigating one of the most precarious and consequential strategic transitions in its history. For over a century, the fundamental business model of the telecom operator was virtually unassailable: lay the physical network, acquire the subscriber, and charge a premium for access. This model funded the massive capital expenditures required to wire the globe, build cellular towers, and usher in the mobile revolution. However, as we look toward the second half of the 2020s, that paradigm has irrevocably shifted.

The very connectivity that operators spent billions to deploy has become the victim of its own success. It is now a ubiquitous, expected, and heavily commoditized utility. In boardrooms across the globe, C-suite telecom executives are confronting a stark realization: the telco revenue model is structurally broken.

The core products that historically drove massive profitability—voice, messaging, and data—are now low-margin commodities with little pricing power. The industry finds itself trapped in a cycle of relentless capital expenditure, required to fund the rollout of 5G Standalone (SA) and deep fiber networks, while the top-line revenue generated by these networks remains stubbornly flat. The era of relying on basic access fees as the primary engine of corporate growth is officially over. Moving forward, enterprise revenue is now mandatory.

2. The Consumer Plateau: Why B2C Can No Longer Sustain the Industry

To fully grasp the urgency of this pivot, one must examine the sobering data emerging from the business-to-consumer (B2C) segment. The consumer market, once the undisputed cash cow of the telecom world, has reached a state of profound saturation. Core revenues have flatlined. ARPU growth has stalled globally, while operating costs continue to rise.

According to the comprehensive PwC Global Telecom Outlook, the willingness of consumers to pay for connectivity is flat-to-down. Despite the fact that global data consumption over telecom networks is expected to nearly triple by 2027—driven largely by high-bandwidth digitized video and social media consumption—this surge in traffic is not translating into a proportionate surge in revenue. In fact, PwC projects that global mobile Average Revenue Per User (ARPU) will actually tick down marginally to $6.20 in 2029, a decrease from $6.32 in 2024. Telcos are carrying exponentially more data for the exact same, or slightly less, money. Consumer connectivity no longer drives growth.

This stagnation is heavily echoed by insights from KPMG's "Telco to Techco" analysis. KPMG reveals that while the broader technology sector has enjoyed explosive expansion, telecom service revenues have languished with a compound annual growth rate (CAGR) of just under 1 percent. In their assessment, KPMG forcefully concludes that telcos' traditional business models are no longer fit for purpose to address new digital opportunities.

The B2C market is characterized by hyper-competition, regulatory price caps in many jurisdictions, and an end-user base that views connectivity as a basic human right rather than a premium service. While consumer revenues will continue to provide a vital, massive base of cash flow to sustain legacy operations, they can no longer be the narrative presented to shareholders for future growth. The path forward necessitates looking elsewhere, specifically toward the complex, high-value needs of the modern enterprise.

3. The $400 Billion Enterprise Lifeline

If the consumer market represents a plateau, the enterprise (B2B) sector represents a soaring mountain of untapped potential. However, simply shifting sales teams to target corporate clients with traditional connectivity packages is a deeply flawed strategy. The nature of enterprise demand has fundamentally changed, and operators must adapt their offerings accordingly.

Research from GSMA Intelligence has quantified this shift, identifying a staggering $400 billion addressable market for telcos in B2B technology services by 2030. This opportunity equates to approximately 35% of the existing mobile operator revenue base worldwide, providing a definitive lifeline for an industry in desperate need of a growth catalyst.

Yet, the GSMA report contains a critical caveat: telcos must look far beyond connectivity-driven solutions. Currently, core telecom B2B services—such as SD-WAN, unified communications, and standard mobile voice and data—contribute around 70% of operators' B2B revenues. However, these legacy services offer virtually no headroom for expansion, with a projected CAGR of just 3% through 2030.

In stark contrast, enterprise spending on advanced technology services—including cloud computing, edge networks, cybersecurity, and artificial intelligence—is exploding. This advanced tech market was valued at over $1.16 trillion in 2023 and is expected to grow at a robust 14% CAGR. To capture a meaningful share of this market, telcos must move up the stack. Growth now comes from platforms and services, not access alone.

Enterprises in sectors like manufacturing, financial services, and automotive are undergoing massive digital transformations. They are investing heavily in advanced connectivity, IoT, and AI technologies to bolster operational efficiency and agility. These innovations are generating massive data volumes that require localized, highly secure processing environments. They do not just need a pipeline to the internet; they need a localized digital ecosystem. Enterprise demand is accelerating.

4. The Physics of Enterprise Demand and the Edge Advantage

The catalyst for this shift in enterprise spending is rooted in the physical requirements of next-generation applications. AI, gaming, fintech, and real-time applications require low-latency, local execution.

For the past decade, enterprises happily migrated their workloads to centralized public clouds operated by hyperscalers like AWS, Google Cloud, and Microsoft Azure. But the centralized model is now showing its physical and geographical limitations. When a robotic arm on an assembly line utilizes computer vision to detect microscopic defects, or when an autonomous vehicle relies on AI to navigate a complex intersection, sending data to a centralized data center hundreds of miles away introduces unacceptable delays.

Furthermore, stringent data sovereignty regulations are forcing enterprises, particularly in finance, government, and healthcare, to process and store data strictly within their own national or regional borders. Centralized clouds, by their nature, struggle to meet these localized requirements efficiently and economically.

This is where the telecom industry holds an asymmetrical advantage. Telcos have already invested heavily in data centers, MEC, and edge computing. They possess the distributed real estate, the power infrastructure, and the localized fiber networks necessary to bring cloud computing directly to the enterprise's doorstep. They have the trusted brands, regulatory approvals, and established billing relationships with millions of corporate customers. In theory, telcos are perfectly positioned to win at the edge.

5. The Monetization Gap and the Software Abstraction Imperative

Despite this inherent advantage, the reality on the ground is less triumphant. The telecom industry is suffering from a profound monetization gap. While the physical assets are in place, billions in stranded infrastructure exist across the globe. Much of this capacity remains underutilized, generating little or no return.

Why are these assets sitting idle while enterprise demand skyrockets? The answer lies in the absence of a software abstraction layer. Demand has shifted, but telcos can't capture it. Telcos lack the speed, tooling, and product frameworks to monetize this demand.

Having an empty rack in a Multi-access Edge Computing (MEC) facility does not make a telco a cloud provider. Enterprise developers demand the frictionless, automated, API-driven experience they receive from hyperscalers. When they attempt to deploy workloads on telco edge infrastructure, they are often met with fragmented systems, manual provisioning processes, and a lack of unified orchestration. Without a monetization layer, the telco edge remains a cost center, not a growth engine. Infrastructure exists, but revenue requires transformation.

This sentiment is echoed by recent analysis from McKinsey & Company, which notes a significant inflection point in the technology sector: enterprise spending is shifting from pure infrastructure development toward the software that allows organizations to monetize that infrastructure. For telcos, building the MEC node was only step one; deploying the software to productize it is the critical, mandatory step two.

6. Productizing the Telco Edge with Swarmio Core

To transition from a provider of raw infrastructure to a purveyor of high-margin edge cloud services, telcos must adopt a new operating paradigm. They require a unified system that bridges the gap between their physical assets and the enterprise developer.

This is the exact purpose of platforms like Swarmio. Swarmio acts as the operating system that productizes the telco edge. It provides a simple, repeatable model that turns telco assets into sellable edge cloud products.

The architecture of this transformation is built on a structured, three-layer approach:

1. Layer 1: Telco Assets: This represents the foundational layer where the infrastructure already exists. It includes edge and MEC locations, regional data centers, network infrastructure, bare metal, and public/private cloud resources.

2. Layer 2: Swarmio Core: This is the critical software abstraction layer. Swarmio Core converts infrastructure into products. It acts as the unified control and monetization layer for the telco edge. It provides zero-touch orchestration, automating deployment and operations across heterogeneous infrastructure. Crucially, pricing, policy, and usage are embedded in the platform, ensuring built-in monetization.

3. Layer 3: Revenue-Ready Solutions: Once the core is established, the telco can deploy specific industry verticals. These are packaged, priced, and ready to be sold by telcos. By utilizing this platform, telcos can launch new edge cloud services in weeks, not years.

7. Activating High-Margin Verticals without Capital Drag

One of the most significant advantages of this operating system approach is massive capital efficiency. Historically, if a telco wanted to launch a new product vertical, it required a massive, bespoke IT build, complete with new hardware, siloed software systems, and heavy systems integration.

With a unified platform, expansion becomes frictionless. Swarmio expands into new verticals on a single Core. Every vertical runs on the same Swarmio Core—no re-architecture, no platform sprawl. A single Swarmio Core deployment supports multiple sites and verticals, enabling growth without rebuilding platforms or increasing operational complexity.

This allows telcos to rapidly attack the most lucrative segments of the $400 billion enterprise market through a partner-led vertical expansion. Partners bring domain expertise and customers; Swarmio delivers the orchestration, automation, and monetization layer, enabling fast, capital-efficient expansion.

For example, Sovereign AI is becoming a massive requirement for governments and enterprises. Swarmio AI turns telco edge infrastructure into sovereign, low-latency AI services for enterprises and governments. The telco can offer fully managed AI inference on telco-edge GPUs, ensuring the workloads remain data-resident and compliant by design.

Similarly, the platform enables the deployment of Swarmio Gaming, a revenue-generating, latency-critical vertical built on Swarmio Core. Telcos can offer Game Server Hosting as a Service to B2B game publishers, providing low-latency game hosting on the telco edge, fully managed.

8. The New Commercial Reality: Usage-Based Growth

Ultimately, the transition "up the stack" is about rewriting the telecom financial model. The industry must break free from the constraints of static, flat-rate monthly subscriptions that fail to capture the true value of the network.

By deploying a monetization layer, telcos unlock a telco-native commercial model designed for predictable expansion and long-term scale. This model is structured around a combination of fixed recurring revenues and variable upside.

The foundation is built on Swarmio Core Access Fees, which provide mandatory platform access per telco group, and Site Enablement Fees, which scale by deployed sites and edge locations. This creates a stable baseline.

However, the true exponential growth engine lies in Usage-Based Fees. Revenue is generated by consumption, with variable revenue tied to solution-specific usage such as compute, inference, transactions, or workload metrics. This ensures that as an enterprise customer scales their AI models, or a game publisher sees a spike in player concurrency, the telco's revenue grows naturally as demand increases. This is the exact financial mechanism that propelled the hyperscalers to trillion-dollar valuations, and it is now available at the telco edge.

9. A Repeatable Blueprint: Land, Expand, Scale

The commercial rollout of this enterprise strategy relies on a repeatable expansion model designed for telco group deployments.

• LAND: The journey begins with an initial deployment with a single operator. It involves launching one revenue-ready solution across limited sites or regions, allowing for fast validation of performance and monetization. The goal is to prove value inside one operating unit.

• EXPAND: Once validated, operators can go deeper inside the same telco group. This phase involves activating additional solutions on the same Swarmio Core and rolling out across more edge sites and regions. This strategy increases revenue per telco without replatforming and maximizes value within one telco relationship.

• SCALE: Finally, operators replicate across the telco group footprint. By extending deployments to other countries and operating companies, the telco can reuse the same platform, processes, and commercial model. This turns one telco win into a multi-region platform rollout.

Conclusion: The Mandatory Evolution

The era of the pure-play connectivity provider is drawing to a close. The market has spoken: consumer connectivity is a necessary utility, but enterprise edge computing is the premium growth engine of the future. The telecommunications industry stands before a $400 billion opportunity, armed with the precise physical infrastructure required to capture it.

To bridge the gap between dormant assets and enterprise demand, telcos must adopt the mindset of a technology company. They must deploy the software abstraction layers necessary to productize their edge, automate their orchestration, and monetize their capacity on a granular, usage-based level. The infrastructure advantage is real, but it must be activated. For the modern telco, moving up the stack is no longer an ambitious goal; it is a fundamental requirement for survival and future prosperity.

References & Further Reading:

1. Market Intelligence: GSMA Intelligence: Telcos eye $400bn enterprise opportunity

2. Industry Strategy: McKinsey & Company: Technology, media, and telecommunications M&A outlook

3. Telecom Projections: PwC: Perspectives from the Global Telecom Outlook 2025–2029

4. Business Model Evolution: KPMG: Telco to Techco