AT&T once earned as much as 14 percent of its total revenue from “non-communication” services, mostly related to its linear TV subscription business, which the firm now has spun off to shareholders.
Many “mobile operators” and “telcos” are looking to expand revenues from sources beyond the traditional connectivity services, according to GSMA. Some telcos in the Asia-Pacific region have gotten as much as 15 percent up to 50 percent of total revenues from non-communications products, according to Twimbit.
Before it spun off its linear video business, AT&T had booked as much as 40 percent of total revenue outside of core communications services and products. On average, larger telcos book as much as 22 percent of total revenue from sources outside their communications core.
Indices such as revenue from “non-core” sources is important for a number of reasons. It can show that “new product” progress beyond basic connectivity is possible. Growing revenue beyond the core also opens up the possibility that transformation also is possible.
To the extent that connectivity providers want to grow beyond “access and transport” to provide all sorts of value that create new revenue upside, the percentage of “non-core” revenue matters.
For a few firms that might attempt a substantial “digital transformation,” the revenue contributors matter even more. If any connectivity provider can reach the point that more than half its revenues come from non-connectivity sources, we might argue that firm has transformed its business model.
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