Wholesale Telecom Revenue Faces Transformation Amid Voice Decline and Data Surge
Traditional wholesale telecom revenues are undergoing a seismic shift. According to Subex’s latest analysis, voice interconnect revenue—once the backbone of wholesale telecom—has plummeted by nearly 80% over the past decade, while SMS revenue has been decimated by 94%. This collapse stems from the dominance of over-the-top (OTT) platforms like WhatsApp and Zoom, which now account for more than 60% of international person-to-person calls.
However, the broader wholesale telecom market is thriving. Valued at $470 billion in 2024, the sector is projected to grow at a robust 10.6% compound annual growth rate (CAGR), hitting $1.74 trillion by 2037. This growth is driven by new business models centered on data-centric services, 5G-enabled roaming, and digital transformation, presenting unprecedented opportunities for operators willing to adapt.
Wholesale’s New Growth Engines Beyond Voice
As traditional voice revenues dwindle, wholesale telecom divisions are increasingly pivoting toward data-driven services and advanced connectivity offerings. Data now contributes over 85% of average revenue per user (ARPU), surpassing voice revenues, which contribute less than 10%. Emerging revenue streams include:
- 5G-powered roaming: With real-time analytics and advanced subscriber services, wholesale roaming revenue is expected to double between 2024 and 2028.
- IoT-driven revenue: Internet of Things (IoT) connections are forecasted to generate $2 billion in wholesale roaming revenue by 2028.
- Cloud and enterprise connectivity: Operators are monetizing fiber, cloud, and SD-WAN solutions, unlocking premium recurring revenues.
These offerings reflect a structural transformation of wholesale, turning it from a cost center into a telecom growth engine. Operators adopting a multi-line-of-business (LoB) approach are emerging as digital ecosystem leaders.
Challenges in Wholesale’s Digital Transformation
Despite these optimistic prospects, transitioning from voice-centric operations to diversified, data-driven models is fraught with challenges. Subex’s insights highlight key hurdles:
- Outdated operational and billing systems unable to handle new revenue streams.
- Complex interconnect settlements involving OTT services, IoT, and fiber partnerships.
- Need for advanced analytics to ensure profitability in multi-partner ecosystems.
To address these issues, leading telcos are embracing modern platforms like Subex’s Partner Ecosystem Management (PEM). By integrating interconnect, IoT, and enterprise billing with predictive analytics, PEM enables operators to optimize their wholesale operations, detect anomalies, and manage large partner portfolios seamlessly.
Future Outlook: Wholesale’s Third Generation
Industry observers now refer to the evolution of wholesale as its “third generation.” This new model goes beyond traditional connectivity and capacity leasing to integrate IoT, cloud solutions, and analytics-driven digital services. By modernizing their operations and adopting an ecosystem-first strategy, telcos are positioning themselves not merely as connectivity providers but as key players in the broader digital economy.
The implications are clear: wholesale and interconnect voice margins are unlikely to recover. However, by capitalizing on 5G, IoT, and data services, operators can unlock significant growth. The wholesale telecom market, once marred by legacy decline, is shaping up as one of the most exciting areas for innovation and revenue expansion in the telecom industry.
Learn more about transforming wholesale strategies in our upcoming webinar.
