Telcos fund the 5G highway but hyperscalers collect the revenue

Tecnotree says AI and real-time event-driven pricing are the fastest routes out of the margin compression trap.

Southeast Asian telcos are struggling to turn rising 5G adoption into stronger revenues, as faster networks are still being sold through older connectivity pricing models.

The gap is visible in Malaysia, where 5G penetration has reached 50% but stronger telco revenues have yet to follow. Prianca Ravichander, CCO and CMO of Tecnotree, said the issue is not the network itself, but the business model built around it.

“5G delivered speed, but it automatically didn't deliver revenue,” Ravichander said. Operators invested heavily in spectrum and infrastructure expecting new income streams, but many received “faster pipes carrying old business models.” More data traffic under the same pricing logic, she said, becomes “margin compression at scale.”

The pressure is made worse by hyperscalers and digital platforms capturing value on top of telecom infrastructure. “Telcos are actually funding the highways, but others are monetising the traffic,” Ravichander said.

Basic mobile and data services are no longer enough because connectivity has become a commodity. Customers are less focused on buying more gigabytes and more interested in outcomes, service quality and digital experiences. Ravichander said networks now support ultra-low latency, slicing and massive IoT, but operators are still selling larger data bundles.

To close the gap, telcos need to move from “plan, launch, and bill” models to “sense, predict, and earn” systems. AI can help operators predict customer needs, price offers dynamically and trigger them at the right moment.

Enterprise services could also create new revenue streams through SLA-based pricing, partner settlements, intelligent bundling, wholesale multi-tenancy, MVNOs and satellite-sharing models.

For Ravichander, the shift is not about selling more connectivity. It is about moving from subscriber and ARPU metrics towards marketplace-style models that capture more value from the networks telcos already fund.