Fiber is fast. 5G is ubiquitous. And neither is a growth strategy anymore.
Operators across North America have spent the better part of two decades building the most capable connectivity infrastructure in history — and are now watching the revenue ceiling on that infrastructure approach faster than anticipated. The core pipe is not disappearing, but its economics are. The question facing every CXO in telecom, cable, and ISP today is not whether to move beyond connectivity, but how quickly they can credibly do it at scale.
Connectivity Revenue Has No Growth Potential
The numbers are no longer ambiguous. The core B2B telecom market sits at approximately $270 billion in 2026 with low single-digit growth, while the addressable market for tech services beyond connectivity — specifically cloud platforms, AI, and cybersecurity — exceeds $1.7 trillion and is growing at double-digit rates through 2030. (Deloitte, 2026)
Those two trajectories are diverging at a pace that makes inaction difficult to justify. Global telecom revenue is projected to grow at a CAGR of 2.9% through 2028 — below inflation — while ARPU is expected to decline approximately 2% annually across mobile, fixed broadband, and voice services. (PwC, 2025) Monthly mobile ARPU globally is expected to tick down to $6.20 by 2029 from $6.32 in 2024, and fixed broadband ARPU, at just $19.81 in 2024, will continue to fall as fixed voice revenue erodes. (PwC, 2025)
For mid-size operators, the practical consequence of these trends is a P&L that gradually compresses unless new revenue categories are introduced. Operators cannot price their way out of this. Traditional telco services — mobile voice, fixed voice, switches, routers, and MPLS — have all seen flat revenue growth in recent years. (Roland Berger, 2025) The legacy portfolio is maturing. The margin model built around it needs to change.
The IT Ecosystem Is Exploding
While core connectivity stagnates, the digital services market sitting on top of operator infrastructure is growing at a pace the industry has not seen in years. The beyond-core segment — covering cloud and infrastructure, IT and managed services, cybersecurity, and business applications — is projected to grow at approximately 8.9% CAGR versus just 1.6% for core and near-core combined, with the total B2B market addressable by operators approaching $700 billion by 2028. (McKinsey, 2025)
More than half of companies are planning to increase telecommunications and technology spending this year, and 80% of business decision-makers already view operators as viable partners for products and services beyond core connectivity. (McKinsey, 2025) That perception — that operators can credibly deliver cloud, managed IT, and security — is a commercial asset that most mid-size operators are not yet monetizing.
The AI opportunity layers on top. Telco B2B AI revenues are forecast to grow at a 65% CAGR through 2030, with SMBs identified as a primary target segment as operators expand their roles in AI infrastructure and services. (Omdia, 2025) The gap between what is available and what operators are currently capturing is substantial — by any measure, the industry is in early innings.
There Is A Capability Gap
If the opportunity is visible, why are most operators not capturing it? While operators have expanded their B2B service portfolios into cloud, cybersecurity, and IoT, intense competition in core cloud services often leaves them with lower margins and complex deal structures, resulting in less control. (Deloitte, 2026) The issue is not ambition — it is execution infrastructure.
Building a cloud and managed services business from scratch requires capabilities that most mid-size operators do not have internally: a productized digital catalog, automated provisioning, a vendor partner network, and a recurring-revenue billing engine that can handle multi-product subscription relationships with SMB customers. Research published in 2026 by IBM Institute for Business Value, conducted in partnership with GSMA Intelligence, finds that SME adoption of telco digital services lags significantly, and that operators must shift from selling connectivity to delivering outcome-driven solutions that build trust, reduce risk, and meet SMB expectations around integration and managed security. (IBM IBV, 2026)
That gap is organizational as much as it is technical. Operators that sell fiber and wireless as their primary commercial motion are not structured to cross-sell a Microsoft 365 seat, onboard a customer to a managed cybersecurity service, or bundle cloud storage with connectivity on a single monthly invoice. The sales motion, the billing infrastructure, and the service delivery model are all different.
Marketplaces Are the Commercial Bridge
The operators closing this gap fastest are not the ones building hyperscaler-scale cloud platforms — they are the ones deploying subscription commerce marketplaces that aggregate best-in-class vendor products and deliver them through existing SMB customer relationships.
This model solves the core execution problem. Rather than requiring operators to build proprietary cloud infrastructure, it allows them to act as a curated aggregation layer — packaging Microsoft 365, Azure services, cybersecurity tools, and managed services into a single subscription relationship with the SMB customer. The connectivity relationship becomes the anchor, and the digital services become the expansion revenue.
Deloitte identifies the strongest near-term opportunity for telecoms as lying specifically in integrating fixed and wireless networks with edge computing, security, and mission-critical workloads (Deloitte, 2026) — a description that maps closely to what a managed services marketplace model enables for the mid-market operator. Bell Canada, T-Mobile, and Verizon have all moved in this direction at enterprise scale, building dedicated business marketplaces that sit alongside connectivity offerings and allow customers to purchase, provision, and manage digital services in one place.
For mid-size regional operators, the infrastructure to replicate this model is now available through turnkey execution partners — without the capital expenditure or the internal hiring cycles that large operators absorbed over years. Operators pursuing the ICT play — coupling connectivity with cloud, IT managed services, and cybersecurity — could capture $80 billion by 2028, with the strongest position going to those who can credibly deliver integrated outcomes rather than point products. (McKinsey, 2025)
The Window Is Closing Fast
The $1.7 trillion figure in Deloitte’s outlook is not a projection for a distant future. It describes an addressable market that is actively being served right now — by hyperscalers, by MSPs, by software vendors, and by a small number of operators who moved early. Every month an operator waits to launch a digital services motion is a month in which an SMB customer’s cloud stack is being built by someone else, deepening a relationship that is difficult to displace.
Business decision-makers already see operators as viable partners for services beyond connectivity. (McKinsey, 2025) The trust infrastructure is in place. What remains is the commercial infrastructure to capture it — a productized digital catalog, a partner ecosystem, and the operational model to deliver multi-service subscription relationships at SMB scale. Operators who close that gap in 2026 will be positioned to capture a disproportionate share of the growth that is already underway. Those who wait will be selling fiber into a market that has already decided who manages the stack running on top of it.