There was a striking theme to the presentations at Conecta’s recent Telco Transformation LATAM event in Rio de Janeiro.
On the surface, they covered very different territory: satellite connectivity and direct-to-device (D2D), telecom consumer saturation, digital identity, cybercrime, regulatory updates and quantum security.
However, there was a subtext, which is that the future value of telecoms services will necessarily be increasingly divorced from the number of bits transported.
Shifting Foundations
Sonia Agnese of Omdia opened with a difficult picture for the industry. Global connectivity revenues grew 3.7% in 2024–25, but Latin America managed only 1.5%. Mobile revenues grew 2.8%, with subscriber growth of just 0.7%, while fixed broadband users grew 6.2% but revenues by only 0.9%. Take inflation into account and any thoughts of ‘growth’ are iffy at best.
Agnese emphasized that B2B represents the major opportunity for future growth – 80% by her accounting, although that seems like a surprisingly low number. Consumer markets are just about saturated and it would be a special economy these days if inequality was decreasing and available spending money was increasing.
Brazil is already a mature connectivity market. ANATEL reported 276.4 million mobile accesses in Q2 2026, with 5G representing 23.9% of the total. Meanwhile fixed broadband had reached 55.4 million connections, more than 80% of them fibre.
Meanwhile, the structure of the market has changed dramatically. Oi, once the country’s great national telecom challenger, has now entered bankruptcy after selling its mobile operation to Claro, TIM and Vivo. The resulting three-player mobile market may be more stable, but it also makes the prospect of generating dramatic growth from conventional connectivity harder.
So the challenge lying ahead for those three players – and their equivalents in most other LATAM markets, which are also seeing a spate of consolidation – is how to make connectivity more valuable to the people and organisations already connected.
Value Space
Henry Douglas Rodrigues of Inatel’s XGMobile programme offered perhaps the clearest illustration.
His presentation on NTN, D2D and satellite connectivity argued that satellite should be seen as complementary to terrestrial networks, particularly for logistics, agriculture, energy, mining, safety and environmental monitoring. He was notably sceptical about D2D as a terrestrial broadband substitute, pointing instead towards SOS messaging, sensors, telemetry, logistics and backhaul. Perhaps not too surprising, but a useful corrective to some of the more breathless satellite narratives.
Brazil itself is becoming a test bed for this model. Claro and Lynk have been conducting D2D trials in Maranhão since 2024, while other initiatives are exploring satellite IoT and direct-to-device connectivity.
What was really striking, though, was Rodrigues’ commercial observation on the value, rather than the capability, of D2D and, more broadly, NTN.
Depending on the context, a satellite connection transmitting a tiny emergency message may be worth considerably more to a customer than a terrestrial connection carrying gigabytes of video. A sensor reporting the location of a valuable shipment may generate more economic value than a consumer downloading another film.
In other words, bandwidth isn’t the value; speed isn’t the value; not even coverage is the value, depending on the circumstance. Value lies in enabling something that has important ramifications to the user.
That should sound obvious, but for a long time the industry’s focused on coverage, speed, capacity and more as proxy values. Throw enough of all those at customers, the theory goes, and they can accomplish whatever they like – which is huge value, obviously.
There are two downsides to that. Firstly, it stops working in environments which are constrained in capacity, speed or coverage; so this philosophy demands large investments of CapEx in infrastructure, spectrum and more. Secondly, it tends to transfer the focus of innovation away from the uses of the connection and towards the kind of connection… which again makes fertile ground for vendors of bigger and faster pipes.
Motive Force
Colin Grealish of Motive made a related argument from a completely different direction. His presentation proposed transforming the telecom network’s entitlement server from a legacy bottleneck into a cloud-native identity and revenue engine.
The idea is that authentication, RCS, SIM-based identity, network slicing and even D2D services could increasingly be orchestrated through a common, cloud-based service layer rather than treated as disconnected network functions.
There is independent evidence that this isn’t simply a vendor fantasy. GSMA Intelligence has been exploring the entitlement server as an increasingly important intermediary between mobile infrastructure and services such as eSIM, RCS, network slicing and satellite connectivity.
All well in itself, but it’s one more example pointing towards a telco architecture in which connectivity isn’t the service, but it’s the foundation for services: identity, security, IoT, resilience, application performance and business-specific outcomes. However, success here is liable to depend on moving away from traditional silos; something which is well under way, but which implies either better coordination between vendors to support outcomes or a structure which is less reliant upon vendor control of their own products.
That said, this is also more in line with enterprise requirements. Enterprises don’t particularly want “5G”. They want fewer supply-chain failures, better logistics, more productive factories, safer workers, more reliable communications and better protection against fraud. The outcome is the product; the technology’s just the means.
New Rules Needed
Meanwhile Osvaldo Aldao, CTO of ENEA, reinforced the point from the network side, highlighting the ability of sophisticated attackers to exploit loopholes in telecom processes and infrastructure without even touching malware. He also argued that AI is making attack automation, and dodging conventional evasion techniques, exponentially more easy.
It’s having an impact on regulation.
ANATEL is now revamping its telecom cybersecurity framework specifically to address malicious uses of AI and vulnerabilities across network layers, cloud computing and data centres. The regulator is moving towards a broader conception of the digital infrastructure ecosystem that covers not only telecoms but also datacentres and emerging technologies – read quantum computing/cryptography, AI and more.
All of these are increasingly inseparable components of the infrastructure supporting the wider digital economy, and ANATEL at least is taking them together. Arguably it makes more sense, when viewing things through a lens of critical infrastructure, security and sovereignty. By contrast, bundling telecoms with media as in the UK makes sense when it comes to frequency regulation or consumer protections.
Trust and resilience are becoming commercially significant, as Hariom Sharma from TNS pointed out. SMS phishing is up 14 times YOY and phishing by voice imitation – vishing – has increased by 300%. Worse, fraudsters are going multi-modal across voice, website and SMS to, for example, imitate respected or feared institutions and look as though they are running two-factor verification. In various countries people increasingly are refusing to answer unknown numbers because of the fraud risk. Meanwhile, if enterprises cannot trust communications from suppliers and customers, the value of the communications network itself starts to erode.
What that means is twofold; it means that there’s a big problem with the perception of fraud (regardless of the chance of it); and it means that trust, which was at one time assumed, is becoming valuable as a product, not merely a security function. Companies that can help customers stand out above the sludge of digital mistrust will be valuable, and this is something that telcos – once they get their house in order on things like signalling – can help with.
Value Proposition
Put the Rio presentations together and a picture emerges of how an effective telecoms player goes to market.
The traditional model was relatively simple:
- Build a network. 2) Grant access to people and machines. 3) Charge for usage (either per message/minute etc or a flat fee).
The emerging model is a bit more complicated.
- Build trusted infrastructure. 2) Grant access to people, machines, services or agents. 3) Provide value appropriate to the user’s context. 4) Charge for the value of the outcome.
Satellite extends the network where terrestrial infrastructure cannot economically reach – not as a replacement, but to deliver value for specific contexts. The SIM becomes a service-enablement mechanism thanks to its identity and authentication features. AI changes both network operations and cybersecurity. Datacentre and telecom infrastructure unites in providing mission-critical sovereign services. Quantum security becomes part of long-term resilience.
Connectivity isn’t wished away in this scenario. However, rather than being the end in itself, it’s the platform that delivers value. Immensely important, but one important step on the journey to delivering value and – to a degree – exactly what’s providing the connectivity is increasingly interchangeable depending on the context of the user.
What that implies is a need for different kinds of metrics. ARPU is fine if you’re offering all-you-can-eat services, but it’s much less relevant to, for example, somebody buying “SOS insurance” to ensure emergency messages will reach people if their expedition in the wild gets into trouble. Or to a company buying the assurance that their contact numbers can’t be spoofed.
The telecom industry has spent decades measuring networks in bits, speed, coverage percentages and subscriber numbers. Those measures remain technically important, but they tell us less and less about where economic value is being created.
Image courtesy of Canva AI
