Wholesale Telecom Market

The expected growth in the market can be attributed to the growth in increasing demand for data, cloud and digital services and Affordable tariffs, wider availability, and cost of communication. However, the market is also held back by Decline in International Voice Traffic, the wholesale business is overly mature, Inflation-driven threats lead the list of evolving external pressures, and Changing Regulatory landscape. Nevertheless, it is anticipated that the Innovation in voice and data wholesale, increasing process automation, and Expansion of telecommunications infrastructure, customer services, and new business models will create lucrative opportunities for the players operating in the Global Wholesale Telecom Market. FIGURE 2 GLOBAL WHOLESALE TELECOM MARKET: MARKET GROWTH FACTOR ANALYSIS (2022-2032) Impact Type Impact Analysis Index Market Factors Base (2022) 2019–2020 2021–2022 2023–2032 Growth Inhibiting Factor MACRO FACTORS Growth Promoting Factor Increasing demand for data, cloud and digital services Growth Steading Factor Affordable tariffs, wider availability, and cost of communication Note: MICRO FACTORS ➢ The Impact indicated the measure of influence on market growth Decline In International Voice Traffic ➢ Each Factor is graded based on historic The wholesale business is overly impact and estimated influence on the mature market. Inflation-driven threats lead the list of evolving external pressures Changing Regulatory landscape Source: MRFR Analysis Copyright © 2023 Market Research Future 39

4.2.1 INCREASING DEMAND FOR DATA, CLOUD AND DIGITAL SERVICES To meet the growing demand, an influx of data in the network simply indicates that there is a market for new fibre lines, more subsea or terrestrial cables, and better networking. Likewise, more data flowing across the network indicates a greater risk and impact in the event of a network outage. To construct more robust network infrastructure, wholesale s are expected to prepare for diversity, resilience, and high availability. Wholesale s is expanding to provide a variety of managed datacentre services, co-location space, and global internet connections. These capabilities are being expanded with cloud, network function virtualization (NFV), and software defined networking (SDN) support. They will become obsolete if they do not adapt in tandem with the digital transition. In this regard, delivering wholesale services entails sustaining a mix of physical and virtualized infrastructure, as well as managing a variety of operations. A wholesale 's customer anticipates using a variety of services, including access to datacentres and co-location facilities, in addition to a globally available wholesale network. This also implies that CAPEX investment is minimised because of infrastructure sharing. More data does not always imply more income or profitability. It does, however, provide a chance for those in a position to rebuild market positions, reimagine corporate processes, and reinvent network and service capabilities. Adoption of new technologies such as SDN or NFV is crucial for optimising CAPEX and OPEX, which aids in market competitiveness. These solutions can help wholesale s overcome architectural challenges and meet expanding connection demand. 4.2.2 AFFORDABLE TARIFFS , WIDER AVAILABILITY, AND COST OF COMMUNICATION The industry has grown exponentially in the last few years due to several factors, including low-cost plans, increased accessibility, the implementation of Mobile Number Portability (MNP), growing 3G and 4G coverage, changing subscriber consumption patterns, government initiatives to support India's domestic telecom manufacturing capacity, and supportive regulatory environments. All sizes of enterprises can benefit from the affordable communications options offered by wholesale voice. This is one method of providing customers with high-quality voice services, and it has number of growth drivers. Features that can be customised to match corporate demands and feature-rich solutions are advantages of the wholesale voice. It is a reliable and successful method of reaching clients throughout the world. There are various advantages to VoIP services that incorporate 5G technology. Higher bandwidth is possible, latency is decreased, and overall performance is enhanced, suggesting that organisations can profit from flawless audio calls and seamless communications even in high-stress settings. To provide flawless voice services, wholesale VoIP providers must stay abreast of the most recent developments in 5G technology and guarantee that the infrastructure can operate to its maximum capacity. It is anticipated that VoIP technology, which is utilised by Internet phone systems and unified communications platforms, will greatly benefit from fifth-generation wireless technology. Future demand for wholesale VoIP is expected to be fuelled by 5G's high-speed connectivity and low latency, which are perfect for VoIP services. The mobile VoIP experience need to be enhanced by 5G adoption, which will increase the demand for wholesale VoIP solutions to keep up with this growing demand. Copyright © 2023 Market Research Future 40 FIGURE 3 DRIVER IMPACT ANALYSIS (2022-2032) Increasing demand for data, cloud 2022-2023 2024-2032 and digital services Affordable tariffs, wider availability, and cost of communication

4.4.1 INNOVATION IN VOICE AND DATA WHOLESALE Wholesale s have broadened their offerings to include managed data center services, co-location space, and worldwide internet connections. These capabilities are being expanded with cloud, network function virtualization, and software defined networking support. Wholesale s' services will continue to evolve from standard IP transport to new service enablement, including the notion of communications platform as a service (CPaaS). Wholesale s have been obliged to innovate in response to the rise of next- generation network services, particularly VoIP, which topped traditional traffic volumes for the first time in the watershed year of 2016. Wholesale s have built global, end-to-end core IP networks and are now developing and delivering services on new platforms and technologies to develop and deliver services more efficiently and cost effectively. While much focus is on the delivery of enterprise communications services, there is also a renewed focus in support for retail telecoms, via a range of wholesale enabled capabilities. 4.4.2 INCREASING PROCESS AUTOMATION Wholesalers are becoming more open and efficient in the way they service their retail and other wholesale or next generation communications customers as process automation increases. The problem of generating revenue growth and profit from wholesale telecoms infrastructure investment remains, but in a quickly expanding communications industry, new opportunities emerge on a regular basis. The evolution of wholesale competition provides a solution to this problem. Partnering and collaboration among wholesale suppliers, network operators, media and content firms, and retail telecoms service providers is a significantly more productive approach than a basic pricing and capacity competition. This allows for the delivery of end-to-end services with streamlined quoting, order management, provisioning and delivery, thus shifting the perception not just about what wholesale s can deliver, but how they deliver it. 4.4.3 EXPANSION OF TELECOMMUNICATIONS INFRASTRUCTURE, CUSTOM ER SERVICES, AND NEW BUSINESS MODELS As technology advances and customer demands change, the telecommunications industry need to adapt, innovate, and provide improved digital services. Whether it's harnessing artificial intelligence, integrating cloud technologies, or improving consumer data processes, the future of the telecom business is undoubtedly digital. The expansion of telecommunications infrastructure, customer services, and new business models necessitates real-time end-to-end visibility, flashy mobile apps, and integration with cutting- edge technologies like as 5G for reduced latency or augmented reality for innovation. Data streaming enables the real-time integration and correlation of data at any scale to optimise most telco tasks. Cloud-native infrastructure and business process digitization are essential enablers. 5G network capabilities and telecom marketplaces provide the door to completely new business models. The need for digital services is continuously increasing. Since 2010, the global population of internet users has more than doubled, while global internet traffic has increased 25-fold. Rapid advances in energy efficiency, on the other hand, have helped to restrain increase in energy demand from data centres and data transmission networks, which each contribute for 1-1.5% of worldwide electricity use. Massive volumes of data are processed in the telecommunications industry. Telecommunications firms are now using big data approaches to provide customer-focused services and to improve their operations. Digital telcos are working to improve their communication systems in order to provide better, more innovative digital services to their clients. Telecom firms are progressing from separate network pieces to autonomous virtualized communications and cloud infrastructure. Copyright © 2023 Market Research Future 44 FIGURE 5 OPPORTUNITY IMPACT FORECAST Quadrant Analysis High Intensity Opportunity Pockets Outreach Innovation in voice and data wholesale Global Increasing process automation Global, Asia Pacific, and Expansion of Europe telecommunications infrastructure, customer services, Global, Asia and new business models Pacific, and Europe Short Term Long Term Low Intensity

4.3.1 DECLINE IN INTERNATIONAL VOICE TRAFFIC The worldwide voice industry began to decline dramatically. Voice traffic peaked at 556 billion minutes in 2014, but by 2020 had dropped to 405 billion minutes and fall to 360 billion minutes in 2022, representing a 5.3% annual loss. Even though overall international voice traffic is expanding by around 13% per year, telecoms' portion of it is decreasing. This is primarily due to the proliferation of free or low-cost voice apps (for example, Skype, Viber, and WhatsApp). It was previously assumed that the epidemic would reduce pressure on telcos to address international voice, but it has hastened the drop as most of the global population has grown accustomed to Zoom, Microsoft Teams, and other video-calling services. Despite diminishing revenues, s maintains significant asset bases and cover operational costs to provide international voice, which is fundamentally unsustainable given falling volumes. Standalone telcos and small telecom groups are seeing their inbound revenues fall while unable to reduce their outward termination expenses. Termination rates are tied to volumes, and diminishing volumes harm the bargaining position of smaller telcos. As a result of this imbalance, their net position in the international voice industry falls by roughly 30% year on year. The international voice industry is saturated with fraud. Several market participants terminate traffic using illegitimate channels known as "grey routes," causing the terminating telco to forfeit its rightful revenue from inbound traffic. Many fraud schemes exist, forcing telecoms to constantly track and block such connections, but finding and blocking all grey routes is practically hard. As a result, fraud causes enormous revenue leakage, often surpassing 50% of possible sales. Copyright © 2023 Market Research Future 41 4.3.2 THE WHOLESALE BUSINESS IS OVERLY MATURE The legacy telecom wholesale sector is made up of four product lines: international voice, roaming, messaging, and capacity (IP transit and managed connectivity), with voice being the most profitable. However, the business mix has shifted due to voice's high maturity, which is declining, as well as a shift to application-based communications. Due to the onslaught of over-the-top (OTT) communication, wholesale voice revenues have been dropping at a rate of roughly 4% year on year between 2015 and 2019. International voice traffic was 7% lower in 2019 than in 2018, while OTT communication volumes increased to three times those of traditional voice during the same period. The post-COVID trajectory is projected to be basically similar. Furthermore, the margins for the voice transit business are extremely low at 2%-3% for many key destinations. In response, many international s pursued volume development by merging or combining their operations with those of others to expand their commercial scale. Some, on the other hand, adopted a different strategy, focusing all their efforts on higher-margin routes and leaving low-margin route numbers and gross revenues to drop. OTT services are more popular. 58% of adults, for example, use their mobile for instant messaging (via services such as Facebook Messenger, Snapchat, and WhatsApp), and 43% use their mobile for OTT voice or OTT video call services.32 On a daily basis, WhatsApp is the most utilized OTT service for phone calls, followed by Facebook Messenger. 4.3.3 INFLATION-DRIVEN THREATS LEAD THE LIST OF EVOLVING EXTERNAL PRESSURES Several external forces are bearing on the industrial agenda for 2023. Ongoing supply chain disruption, increased energy costs, and the present cost-of-living issue continue to cast doubt on telecoms' financial health. Within these, geopolitical factors are having a huge impact, with populism and economic nationalism on the increase, stoking protectionism, and 5G finding itself at the center of a technology "cold war" as industrial policies get more sophisticated. Importantly, telcos are still under pressure in the present high- inflation environment. Because of previous downturns, enterprise revenues are more vulnerable to macroeconomic recession than consumer revenues. Even so, consumer services are still vulnerable to budget cuts, particularly service bundles that include content and streaming services. Although consumer mobile, particularly prepaid, is vulnerable, increasing service bundling within this segment can assist alleviate the expenditure squeeze. Higher operating expenses are another significant impact of inflation, with telecoms' energy and wage costs under particular attention. Rising energy prices have led telecommunications companies to disclose their energy expenses and hedge vulnerability. Energy costs can account for up to 3% of European telco earnings before interest, taxes, depreciation, and amortization, with up to half of this subject to price inflation. Wage inflation is another danger, with wages accounting for approximately 16% of sales. At the same time, because to the increasing popularity of sale-and-leaseback tower outsourcing, infrastructure costs are becoming increasingly vulnerable to inflation. The impact on equipment expenses, on the other hand, is more difficult to estimate and corporations have yet to express worry about this. However, in the current environment, fiber-to-the-home (FTTH) rollouts are fundamentally labor-intensive and a potential source of risk. Copyright © 2023 Market Research Future 42 4.3.4 CHANGING REGULATORY LANDSCAPE The wholesale market segment is evolving as service providers adjust their objectives to meet the demands of today's telecoms industry. The future of wholesale providers is being influenced by shifting regulatory rules, changing technologies, and new investors. With the pandemic and geopolitical circumstances boosting stakeholder focus on network supply chains and the digital divide,