With telecom revenue growth under pressure, communications service providers (CSPs) are seeking new revenue streams. Gaming, the fastest-growing entertainment segment, may be the best diversification opportunity to leverage CSPs’ assets and expertise. More than 60 have introduced at least one type of gaming offer; while some saw a revenue boost, many lacked a holistic strategy and fell short. This Viewpoint outlines go-to-market (GTM) strategies for CSPs to achieve revenue-growth ambitions.
With a high penetration of core CSP services, CSPs have been generating incremental value by offering value-added services. Historically, CSPs have turned to adjacent sectors like media and entertainment to build a service portfolio (storage, digital entertainment, and financial services) and engage more users.
However, traditional media and entertainment are experiencing market saturation, as customers shift toward immersive, innovative entertainment, such as gaming, streaming, and short-form social media.
For CSPs looking to increase their media and entertainment offerings, the key question is which media segment will drive the most growth and value in the near term and beyond.
Among emerging entertainment industry sectors, gaming stands out (see Figure 1). It’s expected to grow from US $455 billion in 2024 to $667 billion by 2029 (~8% CAGR). The following highlights the drivers of this boom:
In-game advertising and mobile/online games represent gaming’s biggest segments, with $200+ billion generated by those segments combined in 2024 (see Figure 2).
Cloud gaming is predicted to be the fastest-growing segment, with ~30% CAGR (2024–2029), followed by in-game advertising.
Gaming could be critically important for CSPs as they work to secure future revenue streams, reduce churn, and strengthen customer loyalty, especially as Millennials, Gen Zers, and Gen Alphas shape the gaming and entertainment landscape. This moment is unique because CSPs can finally go beyond basic connectivity (see Figure 3).
CSPs, with their new network enablers and capabilities, can serve the increasing connectivity demands of PC, console, and cloud gaming. For example, 5G standalone with network slicing enables guaranteed, low-latency connections, while standardized network APIs from initiatives like Open Gateway and Aduna give developers direct access to carrier-grade functionality enabling in-game features like quality on demand.
Early deployments are proof of growing momentum in this space. This includes SK Telecom’s dedicated gaming slices, Orange’s 5G standalone trials, and MTN’s cloud gaming rollout. CSPs should move now to integrate gaming solutions and differentiate their offerings.
For CSPs, gaming has evolved beyond an emerging opportunity into a competitive landscape. Early movers are establishing market barriers through exclusive agreements, strategic partnerships, and intellectual capital. CSPs that hesitate risk ceding ground to those already seeing positive brand equity and financial returns thanks to early bets on gaming. We believe there are five main plays CSPs can use to enter the gaming market (see Figure 4).
By embedding itself in gaming culture, a CSP can strengthen brand equity in gamer and e-sports communities, which are known for being selective and performance-driven. Hosting tournaments, sponsoring influencers, and supporting live events helps boost visibility and highlight network quality. Live demos that showcase 5G-powered streaming and dedicated gaming bandwidth reinforce the link between a CSP’s brand and high-performance connectivity.
With the right partnerships, a CSP can quickly position itself as a preferred provider, offering gamers the reliability and speed they require.
Case study: Jio
In 2022, India’s Jio launched JioGamesWatch, a streaming platform integrated within its JioGames ecosystem, letting gamers live stream content and engage gaming communities. To accelerate its e-sports strategy, Jio formed a joint venture with BLAST Esports (in 2023), bringing globally recognized tournaments to India. In 2024, the first major BLAST event hosted by Jio attracted more than 10.5 million viewers and accumulated 64 million minutes watched, establishing Jio as a major gaming brand among Indian youth.
Lessons learned:
In this model, a CSP sells third-party gaming content and hardware alongside its core services. The CSP leverages its customer base and retail channels to sell consoles, devices, and subscriptions (e.g., Xbox Game Pass and cloud gaming platforms) as standalone or bundled packages. This approach mimics existing models for streaming services (e.g., Netflix resale). It’s a low-risk, volume-driven model that increases the CSP’s overall offering without major investment. However, CSPs using this model may experience difficulties, such as limited control over customer experience and dependency on vendor relationships.
Case study: Telefonica
In 2020, Telefonica allowed Spanish customers to make Fortnite in-game purchases via their phone bill, securing 5% of the proceeds as Telefonica revenue. In December 2024, the partnership deepened, with Telefonica preinstalling the Epic Games Store on new Android phones in the UK, Germany, Spain, and Latin America, potentially reaching 300 million subscribers.
Lessons learned:
In this model, the CSP leverages existing network infrastructure (e.g., fiber to the home [FTTH], 5G, edge data centers [DCs]) and network API platforms to deliver enhanced gaming experiences enabled by network APIs (e.g., quality of demand) and advanced networking solutions. Today, less than 5% of global gaming revenues are directly reliant on CSP-specific capabilities, such as low latency, quality-of-service guarantees, edge computing, and network APIs. With new use cases and standardization, this percentage is expected to rapidly increase. CSPs using the enabler model focus on collaborating with B2B customers to create advanced gaming experiences by focusing on:
This strategy involves CSPs owning or white-labeling a cloud gaming platform to generate recurring revenue and broaden the digital entertainment portfolio. Distribution occurs via existing multimedia platforms or standalone offerings.
This gives CSPs more control over the value chain (except content creation) and the chance to cross-sell to current customers and competitors’ users. However, the model demands strong system-integration capabilities, commercial use of network features like low latency, and an ability to compete with established gaming platforms.
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