System integrators to capture $43bn in enterprise services
While telcos focus on providing connectivity, system integrators are capturing a projected $43bn in enterprise services by embedding AI and cloud capabilities directly into industry-specific workflows
System integrators (SIs) aren’t stealing telco revenue – they’re earning it by doing what telcos have found difficult: translating technology into transformation.
In part one of this series, we explored how hyperscalers and SIs are reshaping the enterprise artificial intelligence (AI) landscape, often at the expense of telcos. Now, we focus on SIs, which are projected to capture $43bn in telco-related services by 2029, according to Canalys.
Across Asia, SIs are pulling enterprise value away from telcos because they excel at turning hyperscaler platforms and network capacity into business outcomes tailored to specific verticals.
Why SIs are winning
SIs succeed where telcos often stumble: contextualisation. They speak the language of the enterprise and understand what businesses want to achieve, while remaining grounded in regulatory realities, operational constraints and industry-specific workflows. This mix of customer insight and operational depth allows SIs to lead AI adoption in ways that telcos, focused mainly on infrastructure, struggle to emulate.
- Japan: NTT Data’s work in smart factories exemplifies this. Its Feet on the Floor, Eyes on AI initiative guides manufacturers through generative AI implementation, blending deep domain knowledge with hyperscaler tools. The company’s ability to embed AI into operational workflows, rather than just deploy infrastructure, has made it a trusted partner in industrial transformation.
- South Korea: Samsung SDS’s Cello Square uses generative AI to detect logistics risks and optimise supply chains. It embeds AI into real-world operations, predicting delays, improving routes and aligning with regulations. This shows how SIs deliver business outcomes, not just tech deployments.
- Singapore: NCS connects enterprises with hyperscalers like Amazon Web Services (AWS) and Azure, adding layers of compliance, governance and operational context that telcos alone cannot deliver. Its $130m AI initiative is not just about technology – it’s about frameworks, roadmaps and execution tailored to verticals like healthcare, transport and financial services.
Indeed, SIs are becoming enterprise AI architects, embedding technology into strategy and capturing the high-margin services telcos once pursued.
The mechanics of SI-led transformation
SIs don’t just implement – they orchestrate transformation. They lead with discovery, co-create roadmaps and embed themselves across business units to drive adoption and ensure outcomes. Their fluency in both cloud-native technologies and enterprise realities positions them as strategic allies, not just service providers.
AI-forward telcos also recognise the need for collaboration. For example, China Telecom’s Xirang, one of the world’s largest telco-led AI platforms, was not built in isolation. It relies on 39 partners, many of whom are SIs, to create industry-specific models and applications.
In this world, telcos can no longer rely on bandwidth alone. They must embrace cooperation and ecosystem-thinking to stay relevant.
Fly or fade: What telcos must decide
Connectivity is evolving. Digital technologies like the internet of things (IoT), AI and advanced analytics are reshaping how enterprises consume networks. This new landscape demands specialisation, vertical integration and seamless customer experiences.
The $43bn that SIs are projected to capture is not simply new market revenue; it is telco money walking out the door. To survive, telcos must:
- Redefine their role: Decide whether to lead, enable or support in key verticals.
- Build new capabilities: Move beyond connectivity into data, AI and vertical expertise.
- Enable collaboration at scale: Establish clear rules of engagement with SIs and hyperscalers that reward joint value creation.
The heist is in progress. SIs are taking what telcos once owned. The only question is whether telcos will wake from their slumber – or be locked out of the vault for good.
In part three of this series, we’ll explore how telcos can use sovereign AI infrastructure to break free from hyperscaler dependence and recapture enterprise trust.
Edwin Lin is principal consultant at Omdia, part of Informa TechTarget
