The top 100 telecoms operators generated €1.39 trillion in turnover in the most recent full financial year, but revenues are increasingly coming from non-traditional services

Let’s face it, telcos don’t really exist anymore.

Just take a look at the headlines generated at Mobile World Congress 2018. Alongside the endless posturing around 5G rollout, which admittedly is traditional telco territory, much of the talk from the show centred on opportunities in IoT, driverless cars, artificial intelligence, blockchain, and the like. Where extending network connectivity was once the end goal, now it is a means to an end and the real revenues lie elsewhere. Generating massive revenue streams from IoT and AI could be some way off, but there is serious money to be made now from non-traditional services like video.

Or to put it another way, where once the big guns in the telco world relied on their radio networks to make money, they are now increasingly looking to moving pictures to drive their top lines, and video is becoming a core telco offering.

The top 100 operators by revenue together generated €1.39 trillion in turnover in the most recent financial year, according to the new issue of Total Telecom’s Global 100 report. Currency headwinds mean that’s a dip compared with the previous year, but up on the €1.33 trillion they made two years ago and €1.28 trillion five years ago.

It would be misleading to suggest that this is entirely organic growth though. The fact is, video has become such an important element in the telco toolkit that we have tweaked the methodology of the Global 100 to account for it. Where once we stripped out TV and video revenues from certain major players – the big cable companies, essentially – with a view to gaining a clearer picture of telecoms turnover, now we are now including these revenue streams, since they have become an intrinsic part of the business formerly known as telco. 

The change – in both methodology and in the way telcos are driving their businesses forward – is in no small part driven by perennial ranking leader AT&T. We are still in the process of analysing the data for the latest G100 report, but we’re not giving too much away by letting slip that the U.S. giant once again tops the table, its turnover some €30 billion higher than the number two player.

AT&T consolidated its lead in the Global 100 in the 2016 ranking, largely thanks to the July 2015 acquisition of DirecTV which helped drive 11% revenue growth, or an uptick of more than €28 billion compared with the 2015 table. And now it is moving further into the content world, embroiled as it is in a legal – and increasingly political – battle to secure the $85.4 billion (€70 billion, at current exchange rates) purchase of Time Warner, a clear indication that the lines between traditional telco and media company are only going to blur further. 

That said, the U.S. operator has not forgotten its radio roots, and neither have its major rivals. 

In February AT&T shared details of some of the dozen cities in which it plans to launch 5G by the end of this year using multiple spectrum bands, including mmWave. The U.S. aims to be at the forefront of 5G development, with FCC chairman Ajit Pai telling MWC attendees that the country will auction off spectrum suitable for the fifth generation of mobile technology in November.

T-Mobile US made a similar announcement at MWC, revealing plans to roll out 5G in 30 cities by year-end, working in partnership with Nokia and Ericsson, with the first 5G smartphones coming to market in early 2019. The telco, whose parent Deutsche Telekom hopped up the new Global 100 table into fifth place, also recently shared plans to bring an online pay TV service to market this year. 

However, Verizon, a major competitor to both T-Mo and AT&T and number two in the G100 for several years, has had some trouble bringing its online TV service market, but it has got an eye on content, expanding its partnership with Netflix and pushing that service hard alongside its Fios fibre-based triple-play offer, for example.

For telcos exploring the TV opportunity there are some serious decisions to be made, including selecting the right content, as the experience of a couple of the operators in the top 15 of the Global 100 shows.

As has been widely publicised, BT is spending big on sports rights. In mid-February the U.K. incumbent committed €1 billion for a further three years’ worth of rights to Premier League football matches – that’s £295 million (€333 million) per season – starting in 2019/20.

Spain’s Telefonica, meanwhile, is experimenting with original, local language programming. Last month it announced that it will launch 12 original TV series on its Movistar platform in at least 13 countries this year, spearheaded by La Peste (The Plague), alongside third-party content. It has a budget of €70 million for original content, €10 million of which is funding the creation of La Peste.

We’ll tell you exactly where those two players rank when we publish the full Global 100 data in a couple of weeks. In the meantime, put your feet up after a hectic week in Barcelona and turn on the TV, or the device of your choice, and kick back with your favourite show, whether it’s a Spanish thriller or 22 men chasing a ball around a field. I know where my preference lies, but I have a massive spreadsheet of telco financial data to analyse first!

Edited to correct total turnover figure.