A promising choice for telecom companies is a strategy that could be called seeking adjacent verticals — that is, providing branded content, financial services, lifestyle services, and e-commerce services over your pipes as an ancillary business. In the ecosystem of digital content, operators hold a critical card: a central position in the distribution value chain and a direct line to customers. France’s Orange, for example, has made an ambitious move into smartphone- and tablet-based banking and now boasts more than 15 million mobile payment customers in Africa and 300,000 mobile banking accounts in Poland. In early 2016, the company bought 65 percent of Groupama Banque in order to use it as a foundation for expanding digital banking services, first in France and then elsewhere in Europe.
A further strategic opportunity for telecom companies lies in revenue streams keyed to connectivity, a particularly favorable option once companies have upgraded their networks so they can handle even the most sophisticated applications. Included in this category are machine-to-machine communications, telematics systems, easy payment options (such as using the phone to process billing transactions from other companies and accounts), and networking for the Internet of Things. The customer base for these services is wide and potentially lucrative: utilities, industrial supply chains, smart homes, smart cities, and cybersecurity providers, among many others. Indeed, most large operators, including Orange, AT&T, Telefónica, and Verizon, have adopted some form of this business model, charging a fee to providers as well as consumers to manage and maintain connected services.