Ready player CSP: Time to level up & seize gaming growth

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.

DO CSPs HAVE A RIGHT TO PLAY IN GAMING?

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:

• A growing number of users across all platforms, expected to reach ~3 billion by 2029
• The democratization of technology, driven by device proliferation (e.g., mobile) and declining hardware/software costs
• Rising importance of e-sports and streaming among Millennials and Gen Zers

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.

5 DISTINCT GAMING GTM PLAYS

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).

1. Build a brand presence

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.

Key GTM characteristics

• Ability to quickly build a gaming brand
• Low investment
• Fast time to market (TTM) — contingent on partner selection

Key GTM challenges

• Fierce competition for talent and partnerships with established media, entertainment companies, and other CSPs
• Low differentiation potential (as a standalone strategy)
• Dependence on in-house entertainment and media expertise

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:

• Jio initially established itself as a local e-sports brand by creating a community engagement platform.
• With moderate investment, Jio significantly increased brand exposure among its digitally savvy audience, enabling future cross-selling opportunities across adjacent Jio gaming initiatives.

2. Become a reseller

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.

Key GTM characteristics

• Volume-based revenue growth leveraging CSP sales channels
• Low up-front investment and commitment (digital products incur minimal incremental costs)
• Fast TTM, depending on vendor selection and resale agreements

Key GTM challenges

• Limited influence over the customer experience
• Possible vendor lock-ins

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:

• Pilot product (Fortnite purchase integration with phone bill) showed gaming’s revenue potential.
• Exclusive partnership with prominent gaming company unlocked significant future revenue potential through reselling and cross-selling opportunities.

3. Become an enabler

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:

• Enhanced quality of demand. Network APIs can augment the gaming experience by providing guaranteed enhanced network performance and enabling use cases, such as augmented reality/virtual reality (leveraging quality-of-demand and edge-connectivity APIs).
• Enablement of cloud gaming services. Edge DC infrastructure enables third-party provision of low-latency cloud gaming services.

Key GTM characteristics

• Revenues primarily from B2B customers, with B2C as a secondary revenue source
• Moderate incremental investment (capabilities are built on 5G network infrastructure CSPs have already invested in)
• TTM as a function of network services complexity, CSP network upgrades (e.g., 5G standalone deployment), and exposing network functionalities (e.g., network APIs)

Key GTM challenges

• Requires proximity with developer community to ensure awareness of network functionalities and use cases that could be developed
• Business models and use cases are yet to be defined and widely adopted

4. Become a distributor

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.

Key GTM characteristics

• Ability to leverage existing customer base as well as non-customers
• Potential cross-selling opportunities, including competitors’ customers
• Moderate to long TTM, depending on system-integration capabilities

Key GTM challenges

• Direct competition with pure-play media and gaming companies
• Requires recruiting significant gaming talent
• Successful commercialization of network capabilities is key to differentiation

Case study: MTN South Africa

In late 2024, MTN partnered with Telecoming to launch cloud gaming in South Africa, using 4G/5G networks to deliver console-quality games on mobile devices without costly hardware. Customers can access more than 300 titles using their steam licenses for US $4 to $5 per month.

Lessons learned:

• Market entry with a well-established player lowers entry costs while ensuring local expertise.
• As one of the first movers in cloud gaming in Africa, MTN’s success in South Africa could set the stage for expansion into other African markets.

5. Become a content producer

With end-to-end involvement in the gaming value chain, CSPs can not only enable innovative gaming use cases and provide gaming services via their platforms, they can also develop and produce gaming content. CSPs can create video games (console, Web, or mobile-based) or e-sports content (exclusive events and ownership of e-sports leagues).

Key GTM characteristics

• Expansive profile including retail and wholesale markets
• Investment-heavy strategy driven by in-house development or acquisition capabilities
• TTM dictated by lead time of production capabilities

Key GTM challenges

• High risk: significant investment requirements in asset and talent and uncertain returns
• Increasing cost of development of AAA and AAAA games

Case study: SK Telekom

During E3 2021, the largest video game event in the world, SK Telekom announced its entry into the game development segment. Since then, four games have been released on Microsoft’s Xbox via the Xbox Game Pass, to modest reviews. Multiplayer game Anvil reports its highest player base is around 3,000. SK also formed a $12.5 million fund with the Korea Fund of Funds to support small video game companies in South Korea, further demonstrating its commitment to gaming.

Lessons learned:

• Leveraging its previous partnership with gaming juggernaut Microsoft was key to SK Telekom’s success in this new venture.
• This venture, together with ownership of an e-sports team and previous gaming partnerships, helped SK Telekom gain credibility that has translated into customer goodwill.

FINDING THE RIGHT FIT

A simple way to conduct a preliminary assessment of the risk/reward of the various GTM strategies is to consider two factors (see Figure 5):

1. Media and entertainment capabilities. CSPs with their own media/TV content distribution platforms and production capabilities likely have an inherent advantage in gaming content production and distribution relative to peers.
2. Tier classification. Tiers segment CSPs by customer base size, global reach, and addressable market size. Tier 1 players have an advantage due to their global reach, significant in-house expertise and intellectual property, and a higher capacity to invest (relative to their Tier 2/3 peers).

For example, a Tier 3 CSP with limited media and entertainment capabilities would benefit most from low-investment strategies (e.g., acting as a gaming brand or a reseller).

Due to the regional concentration of CSPs, Tier 3 CSPs have the right to play in their local markets, where Tier 1 CSPs are not present. This lets them tailor the strategies of larger players to their local markets and use existing platforms and structures through wholesale and partnership agreements.

Conversely, a Tier 1 CSP with strong media and entertainment capabilities (already likely acting as a gaming brand) could leverage its position with deeper, higher-commitment strategies, perhaps becoming a distributor or content producer. Tier 1 CSPs like SK, Zain, and Orange have already proven CSPs’ right to play in gaming.

This simple framework is good for a preliminary assessment, but there is a need for a more detailed strategic analysis of various strategies to determine the most effective GTM approach.

Conclusion

A HOLISTIC GAMING STRATEGY

With the rapid evolution of the gaming industry, the window of opportunity for CSPs to establish a foothold is narrowing. Many have tested the waters, but we believe a more holistic gaming strategy can unlock significant value. CSPs can stimulate much-needed revenue (per user and overall) and thus unlock further investments from shareholders by:

1. Going for quick wins (i.e., CSP as a brand and reseller)
2. Leveraging network APIs to develop gaming-specific network-enablement products (i.e., CSP as an enabler)
3. Carefully assessing whether to address more capital-intensive models (i.e., CSP as a distributor and content producer, potentially leveraging partnerships and cofinancing arrangements to enable bold market moves)

By Makram Chehayeb, Miloš Marjanović, Gabriel Mohr, Shahid Khan, Huw Thomas

• By Arthur D. Little
• 28/07/2025
• gaming industry, CSP