Digital inclusion

Telecom companies need to ensure geographic regions and minorities have access to digital networks and services. Many telecom operators today are expanding and upgrading networks. Digital inclusion is an important social factor that focuses on opportunities rather than risks. Equipping more people with proper information and communication technologies can create new jobs, accelerate economic development in innovative ways, and expand people’s ways of enjoying services. The use of novel technologies such as Fixed Wireless Access is also an example of this. Web and software design technology also facilitate access in multiple languages which could aid minorities.

Digital inclusion is commonly understood as ensuring all humans – including those living in disadvantageous situations – have access to information and communication technologies (ICTs). But today, 2.9 billion people in the world (or 37% of the entire population) are still unconnected, despite more and more people gaining access to ICT networks each year. Most of the people without access to ICT networks are in poor economic conditions, in remote areas, minorities, women, the less educated, disabled, or a combination of those.

Worldwide access to the internet

As the notion of equality evolves, the scope of digital inclusion is also being widened. The World Benchmark Alliance notes that in addition to universal access to digital technologies, digital inclusion also encompasses strengthening digital skills at all levels, enhancing trustworthy use of ICTs by mitigating risks, as well as innovating openly, inclusively, and ethically. This wider definition of digital inclusion is aligned with the EU’s Digital Economy and Society Index (DESI), whose assessment of member countries’ digital performance centres around human capital, connectivity, integration of digital technology, and digital public services. The methodology provides insight into the different subfactors that need improvement for the EU to accelerate its digital capabilities. Telecom operators are building new networks in Europe since they are very well placed to help the EU to achieve its goals.

Some may think of enhancing digital inclusion and creating social impact as a philanthropic deed or moral obligation which underpins the license to operate and enhances brand trust. However, social impact can generate economic value and positively affect a company’s financial position as better connectivity, services targeted at minorities, and business model innovation can lead to higher-quality products for a larger customer base. MSCI, to some extent, does include access to communications as a social opportunity factor in its ESG rating metrics. We argue that a stronger focus on digital inclusion can be a revenue opportunity for telecom network operators, something many are already doing.

Cybersecurity services

As telecom companies are experts in data protection, they could also provide cybersecurity services to customers, in addition to maintaining basic network safety. Cybersecurity services are showing above-average growth rates, as they can provide telecom companies with additional revenue sources.

Over the years, the number and sophistication of cyberattacks have shown strong growth. More recently, cybercriminals also target mobile devices and networks. Most small and medium-sized enterprises do not have in-house cybersecurity expertise and have to rely on managed service providers to protect their data and networks. These cybersecurity threats, therefore, provide a business opportunity for telecom operators as they are ideally suited to provide data security services. Some telecom operators (eg, KPN, Telefonica, Orange and BT) already offer such security services. Telecom operators can leverage their existing customer base to sell these services, enhance average revenue per user, and improve client satisfaction scores and client retention rates. Revenues from cybersecurity make up a small part of overall telco revenues at the moment, with Telefonica and Orange generating 1-2% of total revenues from this segment. Interestingly, the growth of cybersecurity services is relatively high. For Orange, cybersecurity revenue grew by 14% in 2021.

The deployment of new products and services (5G, cloud, IoT and edge computing) contributes to further growth of demand for cybersecurity services. This segment, therefore, provides a significant opportunity for revenue growth.