Small but growing revenues
Currently, security revenues make up a small part of overall telco revenues, with Telefonica and Orange, for example, generating 1-2% of total revenues in cybersecurity. Growth, however, is high; for Orange, cybersecurity revenue grew by 14% in the first half of 2021.
Demand for managed security services in general is driven by the increasing value of digital services, a shortage of skilled cybersecurity personnel, and the growing complexity and risks due to the diversified IT landscape combining cloud, edge and operational technology. With many telcos viewing cybersecurity as a significant opportunity for services growth, we can expect the deployment of services such as 5G, cloud, IoT and edge to contribute to further growth in their cybersecurity business.
The cybersecurity market is very fragmented. Customer demand is driving offerings towards integrated security software and services, with companies offering security platforms, not single solutions. We can therefore also expect more mergers and acquisitions in the security area and partnerships with vendors.
