The challenge that operators have to persuade enterprises of their ability to provide vertical solutions has been laid bare in a new survey, which found a majority of technology end users expect to buy basic connectivity from their telco provider.

ABI Research interviewed 455 decision makers across 10 verticals and found that just 13 percent of respondents expect telcos to create new ecosystems for the IoT, IT and cloud services.

More than half, 55 percent, expect to use telcos for pure connectivity, while 31 percent said they wanted operators to bundle “value-added, vertical-specific services” on top of connectivity.

Dimitris Mavrakis, Research Director at ABI Research, said: “While telcos aspire to soon become technology enablers for several end markets, more than half of the actual technology implementers surveyed show limited interest beyond basic connectivity.

“The connectivity market is, and will, remain, profitable for many telcos worldwide, but our survey indicates that there is some interest by technology implementers in more than pure connectivity. This is what we refer to as Connectivity+.”

The research house said telcos should take advantage of their existing assets, like data, devices management, applications and services management, security, and analytics in order to add value.

However, it warned them not to compete with web-scale companies for cloud computing services.

Just four percent said they used telcos for cloud computing services today, and ABI has forecast this will drop to one percent in the next five years.

“Competing with web-scale companies in their own field is impossible for telcos,” said Mavrakis.

“Implementer requirements and telco strategies seem to be disparate for the moment.

“For example, telcos are focusing on the automotive vertical, but our survey indicates that the retail, government, and logistics markets are very interested in telco services.”

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