As a global software provider headquartered in Poland, Aipix have gained extensive experience deploying platforms that enable Telcos and ISPs to launch value-added services (VAS). Through this work, we have been proving that VSaaS-based solutions offer a proven way to close the telecom monetization gap. In this article, we explore why this gap persists and how it can be effectively addressed.
Over the past few years, telecom companies revenue has grown only 1-2% a year globally – figured by GSMA. At the same time data traffic has increased more than 30% year-on-year. These numbers highlight the gap between usage and revenue.
Additionally, McKinsey & Company research shows that telecom providers get no more than 10% of total revenue from digital services, surpassed by over-the-top service providers.
Clients increasingly demand for upgraded solutions with added value, which means just changing and diversifying solely internet tariffs is not enough. The new revenue and real loyalty hides in value-added services which are hard to resist.
The growth of telecom monetization gap: the rising imbalance between usage and revenue explained
PwC’s Global Telecom Outlook reports revenues from telecom service to grow from about $1.15 trillion in 2024 to $1.32 trillion by 2029. Stable but still limited growth.
And what matters too is that OTT, cloud and security providers still rely a lot on the infrastructure provided by Telcos and ISPs. Their revenues are growing faster. This is one of the reasons behind telecom monetisation gap. It highlights the need for digital value-added services like VSaaS to be launched by Telcos and ISPs.
The telecom ARPU challenge in modern digital landscape
The decline in Average Revenue Per User (ARPU) is not the only industry trend losing steam. Is the stagnation of ARPU itself a declining trend?
- Global mobile ARPU is only expected to fall slightly from $6.32 in 2024 to $6.20 by 2029.
- The growth in fixed broadband ARPU was very slight in 2024, standing at $19.81.
- The decline in fixed voice revenues are showing on the surface as a drag on the overall ARPU.
The customers expect the following, they need more data and higher quality and value of services. Nevertheless,they are reluctant to pay more. More imbalance is highlighted – demand growth and steady or even decreasing revenue.
Value-added services as a solution for closing telecom monetization gap
The best way to bridge the gap is to go beyond core telecom internet services by running value-added services (VAS):
- Diversified revenue streams with less reliance on internet pricing.
- Higher customer “stickiness”and lower churn as with more value switching providers becomes less attractive.
- Expansion to digital service providers standing out in the highly competitive market.
- Monetization of infrastructure advances like 5G with the introduction of smart city solutions.
VAS adoption is the best way to address telecom monetisation gap, as Telcos and ISPs use their existing infrastructure to generate additional income.
Video Surveillance as a Service (VSaaS) is one of VAS that has proved to be a promising solution to this issue.
Why VSaaS is a solution for telecom monetization gap
When cloud video surveillance services are deployed based on telecom-centric platforms like Aipix, the Telcos and IPS see only tangible results:
- Services are monetized rapidly with minimal risks. As telecom companies start with a proof of concept (PoC). Then they easily proceed to the service launch and monetisation as the platform is deployed already on their existing infrastructure and seamlessly integrated without heavy upfront investment.
- VSaaS is provided usually through subscription based models which ensures recurring revenue.
- There is a strong and growing demand for VSaaS especially enhanced with AI-based video analytics – estimated market size to grow from USD 3237.84 million in 2026 to USD 3668.8 million in 2027. Customers are demanding the trusted providers like Telcos and ISPs of comprehensive video surveillance service.
- Bundling VSaaS with traditional telecom services is a common way to even double the revenues as well as drive higher ARPU and reduce churn. As more subscribers consume core services and generate new revenue from VSaaS.
- VSaaS is an entry to become more than just the connectivity and internet provider where price competition is high or strictly regulated.
To sum up, when choosing the right platform for launch, the telecom operators and ISPs are highly likely to close the monetisation gap, while leveraging assets they already own.
Easier VSaaS launch and smaller telecom monetisation gap
Aipix is the solution that goes beyond barriers that usually hold back telecom providers from launching VSaaS, like complex integrations, high costs for launch, long time-to-market and other challenges.
The core approach is the following. The solution is out-of-the-box to ensure rapid launch with no risk to the current business:
- No need for upfront infrastructure investment
- On-premise deployment ensures control and security
- Minimal integration requirements
- Rapid time-to-market
- Scalability across large user bases
As a case in point, Video Surveillance as a Service (VSaaS) is a service that provides the perfect blend of flexible scalability, regular recurring revenue, high demand in the market and low initial investment. Aipix is streamlining the VSaaS offer for telecom companies. It’s quick to deploy, to monetize, and to scale, which is exactly what operators need in order to get over the first three hurdles and quickly get into the revenue generating phase.
Conclusion
The telecom monetization gap refers to the disparity between the increased consumption of data and the slow growth of revenues that allow operators to continue to capitalize on that consumption.
To succeed, the spectrum of available options must extend far beyond conventional operator services and include additional revenue streams that satisfy emerging demands for differentiated, and innovative services.
While there remains a significant telecom monetization gap, it’s not simply a matter of marginal gains. The future is to embrace value-added services as a core pillar of strategy, leveraging them to drive growth, stay competitive and cement a provider’s place in the next-generation digital landscape.
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