Why the Telecom industry needs to invest in eSports?

September 20, 2021

The telecom industry is made up of companies that make global communication possible, through the phone or the Internet, airwaves or cables, wires or wirelessly. These businesses built the infrastructure that allows data to be transferred anywhere in the world in the form of words, voice, audio, or video. Telephony operators, satellite companies, cable companies and Internet services providers are the main corporations in the sector.

In the past decade, the industry has experienced significant changes.

Telephone calls were once the largest revenue generator for telcos, but with the continuous advances in network technology this has drastically changed . Telecom has become less and less about voice and more about video, text, and data. High-speed Internet access rapidly became available in homes and businesses all over the world. Services delivered over mobile networks are experiencing the most rapid growth.

Today, it is almost impossible to talk about the telecom industry without associating it with eSports. But what exactly are Esports?

The term eSports refers to the world of organized and competitive video gaming. Competitors from various leagues or teams compete in popular at-home games such as Fortnite, Call of Duty, Counter-Strike… Millions of fans around the world watch and follow these gamers: they attend live events or watch them on TV or online. Streaming services enable fans to watch their favorite gamers play in real time, and this is where popular gamers build their fandoms.

In 2021, the global market for eSports was valued to over USD 1.08 billion, a rise of close to 50% compared to last year. Moreover, global market revenues from the eSports business are projected to increase to as much as USD 1.62 billion by 2024. 

Going back to the Telecom industry, companies aren’t making much money from the tremendous value it is providing to consumers . To add on that, companies in the industry are facing competitive pressures. Operators are feeling the effects of new entrants who continue to push the price floor lower. To do more than just survive in this environment, operators must look beyond cost-cutting opportunities to find new revenue-generating opportunities.

At first glance it may seem like eSports and telecoms aren’t related. Telecoms provide the network to operate video games and eSports is all about gaming. But eSports and telecoms are converging and there are many opportunities for both sides.

For telecom companies, having a foothold in the eSports industry can mean getting ahead of the market by offering services and products relevant to the eSports community before anyone else does.

But before delving deeper into the how of things, let us take a look at some demographics. 

According to Statista the largest living generation in the US is Millennials. This generation is commonly defined as those born between 1981 and 2000. They are known for being tech-savvy with a growing group of consumers that are worth paying attention to – eSports Betting Fans.

The professional video gaming (or eSports) industry is attracting an audience of fans and players around the world who are passionate about their favourite games and teams. As a result, eSports has given rise to a new generation of gamers and enthusiasts that are looking for new ways to interact with their favourite games and teams as well as engage with each other as fans.

eSports Fans look like any other millennial consumer but they have distinct characteristics that make them an attractive target for telecom operators:

  • They are tech savvy – they can’t live without their devices
  • They are social – they love sharing content
  • They are ready for change – they value experience over ownership
  • They have high expectations – they aren’t willing to compromise quality
  • They are growing – they love what is new and different
  • They have the buying power – they are able and willing to pay for their favorite services

In addition to millennials, and according to Statista, 32% of internet users worldwide aged between 16 and 24 (generation Z) stated that they watched eSports. It is expected to be nearly 286 million eSports fans worldwide by 2024, up from 197 million in 2019. Further, a report from PWC estimates that eSports generated $493 million of revenue in 2017 and projects it to grow to $1.5 billion by 2020. A promising fanbase and revenue.

Without further ado, let’s delve deeper into the opportunities eSports present to the Telecom industry:

  1. Diversification of service offerings 

eSports Fans are keen on new ways to experience content, so by offering products & services tailored specifically to them, operators can expand their service offerings.

  1. Creation of new revenue streams  

With live streaming, telecom operators can also offer packages with high limits for data consumption on streaming  video services  and gaming  sites which  will be  an additional  revenue stream that will help  to increase  average revenue per user (ARPU).

  1. Acquisition of new customers 

By offering  new products  and services tailored specifically to them, operators can expand their customer base beyond traditional customers. This will create a sense of loyalty towards the brand by eSports Fans who happen to be avid social media users. This will create a spiral of positive word of mouth on multiple platforms including Facebook, Instagram or Snapchat.

  1. Enhancement of brand awareness 

By tapping into the eSports industry, telcos are using their existing capabilities to expand on their services and cater to a wider audience. The association of the telecom operators’ brand name with an eSports platform will increase user knowledge of the brand and hence improve its visibility. 

  1. Retention of Customers and establishment of long term competitive advantage 

The emergence of 5G and edge computing (the ability to process data in real time between nearby devices, allowing speedy connections) positions telecoms in an area they are uniquely able to help with. Any multiplayer gamer agrees that high latencies, also known as “lags”, are the worst way to ruin the gaming experience. By leveraging technology to deliver a seamless gaming experience, telcos can become the hero gamers always dreamt of and therefore their number one choice for future services.

  1. Rebranded and renewed purpose 

This benefit relates to brand positioning. Operators will be viewed as providers of exciting gaming experiences since they will be directly associated with eSports. Young users will be more receptive to the general offerings of the operators. A generally younger and fresher appeal builds a sense of credibility to telcos, which operate in the ever growing tech field, and an advantage over traditional telecom services.

More ambitious benefits for the Telecom industry include forming close partnerships with developers in the gaming industry with the intent of making gaming content more relevant to local subscribers. This could include translating games into the local language, or changing the background story and images to make them more appealing to the regional culture. When the operator gains confidence and feels ready to compete with the major players, it can even consider developing its own games and products.

Here are some examples of huge telecom companies who partnered with Esports channels in the past five years

2016: Vodafone partnered with German League of Legends team Mousesports, which was acquired by Vodafone Germany in July 2016 . The telco supported Mousesports’ players with their connectivity needs from their home base in Berlin to their tournaments around the world.

2017: French multinational telecommunications operator Orange partnered with E-Ligue 1, the official FIFA tournament for France’s Professional Football League. The league was renamed to “Orange e-Ligue 1”. Orange also promoted the event through its social networks.

2019: AT&T becomes the founding sponsor of mobile eSports league ESL Mobile Open, created by Esports organizer ESL. The year-round league was open to any amateur who wants to compete on their smartphone for a chance to win a cash prize of $330,000. 

2021: Sri Lanka Telecom becomes one of the latest service providers to capitalize on the booming market. Swarmio, the global gaming and eSports technology company, partnered with SLT to launch the SLT eSports Gamer Package, which the duo named “a next generation Gamer Internet solution.”

All of the above examples are yet another indication of the surging popularity of electronic sports, the ever growing industry. 

Intel, Coca-Cola and Mercedes-Benz are among the leading companies, outside of the telecom industry, that sponsor eSports events to reach audiences that are harder to find among traditional media such as TV, radio and print.

Who’s next? 

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