Heightened competition in the mobile services market in Asia-Pacific drives mobile network operators (MNOs) to innovate and shift business model as revenue from traditional services decline. MNOs in the Asia-Pacific region are shifting their target to the business-to-business (B2B) and business-to-business-to-customer (B2B2C) segments as a strategy to offer new services expand the revenue stream.
The mobile services market in Asia-Pacific is expected to experience a slow growth of 2% CAGR from 2018 to 2023, which propels the market participants to innovate. The emergence of technologies in the market such as 5G network, artificial intelligence (AI), augmented reality/virtual reality (AR/VR) and more will pave growth opportunities for market players.
Following the launch of 5G technology, MNOs in Asia-Pacific are shifting their focus to the B2B and B2B2C segments.
Frost & Sullivan recent report on Asia-Pacific Mobile Services Market, Forecast to 2023 highlights growth areas for market players to explore, such as Network Functions Virtualization (NFV), Cloud Computing, Cybersecurity, and AR/VR.
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Shifting Business Model in Asia-Pacific
Roughly 53.2% of the services launched in Asia-Pacific in 2018 were consumer services, whereas, the remaining 46.8% were services targeted at enterprises. However, following disruption from Over the Top (OTT) providers in voice and messaging services and rising competition, the business-to-customer (B2C) segment is under pressure.
Despite this, there is significant potential in the B2B segment as demand from small and medium enterprises (SMEs) and corporations for information and communications technology (ICT) services continue to rise. As more businesses go digital, the demand for ICT end-to-end services among enterprises will increase.
Furthermore, the deployment of 5G networks from 2019 will further increase B2B market services, as 5G networks will enable mobile network operators to provide new services and transform early implementations of cloud-based services, Artificial Intelligence (AI), and Augmented and Virtual Reality (AR/VR) services.
As a result, in 2023, only 25.2% of services are expected to cater to consumers, whereas, the remaining 74.8% are services that will cater to enterprises. Therefore, the shift in focus from B2C to B2B and B2B2C segments is projected to benefit MNOs in the long run by expanding into new services and cater broader spectrum of users.
Moreover, Frost & Sullivan reveals that services in gaming and AI pose immense growth opportunity for MNOs as the services are likely to generate approximately $8.3 billion and $90.4 billion in revenue in 2023, respectively.
In the recent report, Frost & Sullivan recommends MNOs in APAC to focus on the innovation front and collaborate with partners, both within the same industry as well as cross-industry. The benefits of cross-industry collaboration includes co-creation of added value, lowered costs, and enhanced efficiency, which will ultimately futureproof MNOs from the threat of OTT.
Frost & Sullivan also highlights growth opportunities in the Asia-Pacific mobile services market, mainly:
- Network Functions Virtualization (NFV) – The NFV market has grown as a result of the increasing trend toward mobility in enterprise IT infrastructure.
- Cloud Computing – There is potential for mobile network operators to partner with cloud service providers to improve business efficiency and expand new services.
- Cybersecurity – Growth opportunities exist for Managed Security Service Providers (MSSPs) to succeed in enterprise security services. Security is particularly important in the 5G era.
- Augmented and Virtual Reality – AR/VR-based services will boost mobile data usage for businesses and consumers, which ultimately increases revenue for mobile network operators.
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Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at email@example.com