Connectivity is no longer a high-growth market, but it is becoming harder for MSPs to separate it from the services they sell around it. Gavin Jones, director of Wholesale Partners at BT Wholesale, argues that software-defined wide area networking (SD-WAN), cloud services, mobile working and cybersecurity are eroding the traditional boundaries between communications providers and IT-focused MSPs.
BT's market analysis puts compound annual growth in the business connectivity market at around 1%. That headline figure hides sharp differences between technologies. Traditional voice is in decline, with international calls experiencing double-digit falls. Broadband continues to grow on the back of full-fibre rollout and higher ARPUs. Ethernet is flat by connection numbers, though customers are migrating to higher bandwidths.
Mobile is the stronger opportunity, with compound annual growth of around 6% to 7%, particularly in the indirect business market. "A lot of that is seen as more people coming through resellers or MSPs as opposed to dealing with operators direct," Jones says.
Why comms and MSP channels are converging
The divide between communications providers and MSPs is partly historical. Communications providers concentrated on voice and connectivity, while MSPs and value-added resellers focused on applications, IT infrastructure, servers and laptops. "They were kind of focused on the local area network, not necessarily the wide area network," Jones says.
SD-WAN helped blur that boundary between networking and IT. Hybrid working, cloud applications and Microsoft's growing influence across communications accelerated the process. "All of a sudden, the important bit becomes the connectivity," he says. "And the really important bit over the connectivity is cybersecurity."
For Jones, that creates an obvious sales opportunity: "If you're selling connectivity and it's to a business and you're not selling cybersecurity, you're crazy because they just sit hand in hand."
Changing buying behaviour is also pulling the two channels together. BT research suggests customers increasingly want to consolidate around trusted suppliers. "Our research is that people want a partner they can trust ... and that they're really happy to buy multiple products off a single partner."
That is especially relevant among smaller organisations without large internal technology teams. Jones says BT research highlights that customers are happy to research purchases online and through AI tools, but 52% of them want to speak to someone before buying. "They want to talk to an expert," he says.
Digital sovereignty moves up the agenda
Digital sovereignty is another area partners increasingly need to understand, although its importance varies significantly between customers. Sovereignty discussions have evolved quickly. "It started off as, where's your data? ... and what resilience and control have you got?" Jones says. "It's kind of now moving to, are any of those systems dependent on foreign providers or jurisdictions where they could be compromised or disabled?"
BT research shows more than 80% of respondents regard having UK-sovereign data as important. Channel partners should expect questions around location, ownership and access during procurement. "You've got to look at GDPR, you've got to look at the data regulations, you've got to look at who your customers are," Jones says. "When you go through those RFPs or the tenders, they're going to ask you where's the data. They're going to ask you who deals with that data. They're going to ask you, is any of it offshore?"
BT Business has responded with BT Sovereign Services, an end-to-end UK sovereign portfolio spanning colocation, connectivity, voice, cloud and AI. But Jones distinguishes between sectors where sovereignty could be critical and smaller businesses where cybersecurity and data protection are more immediate concerns. For a micro-SME such as a shoe shop or hairdresser, protecting information and keeping systems operational may matter more than the nationality of the underlying infrastructure provider.
"Security and data protection is what's top of people's minds," Jones says. "How that filters into sovereignty depends on your business and everything else."
AI's impact on the channel
BT has initially approached generative AI as an internal productivity opportunity. Employees were provided with AI tools alongside training structured around different competency levels. "You can look at it for internal use, which is efficiency and automation, making people more effective," Jones says.
AI could also reduce administrative work around sales. Jones points to a recent demonstration where AI generated customer-specific proposals almost instantly, incorporating information about an organisation and its wider market. Integrating AI with customer relationship management systems could go further, identifying neglected accounts or prompting salespeople to follow up. Customer service presents another opportunity as agentic AI develops.
Jones also sees AI-powered search changing how companies need to think about their digital presence. "Everybody used to look at their websites when they're trying to sell stuff and they'd optimise them for search engines," he says. "You've now got to optimise them for the AI agents that are out there."
AI raises a potentially uncomfortable question for the channel: if automation allows large vendors to identify, sell to and support vastly more customers directly, could it reduce their dependence on partners? Jones remains unconvinced. While AI will make transactional purchasing easier, he argues that SMEs buying interconnected technologies still need expertise. "They don't want to buy products such as FTTP line, cybersecurity, mobile phones, Teams and some AI to then to be left to integrate themselves. They are looking for someone to actually come in and talk to them and help."
Jones accepts that AI could make purely transactional processes easier to automate, but argues that this is not where the channel's greatest value lies. "From a value-added perspective of consultancy, understanding, security and reassurance, I still think there's a massive market for the channel."
For MSPs, connectivity may lack the explosive growth associated with cybersecurity or AI, but it remains the foundation beneath cloud, communications and managed services. The comms and MSP channels may retain different backgrounds, but the customer problems they address increasingly overlap.
Why this matters for PR and communications professionals
For comms teams in the channel, the practical takeaway is that AI is changing the language of sales conversations as well as the tools used to run them. As buyers increasingly research through AI agents, the way vendors and partners present themselves online needs to shift - optimising for AI search is becoming as important as optimising for Google. Meanwhile, the convergence of connectivity, security and sovereignty means messaging that treats these as separate product lines will feel increasingly out of step with how customers actually buy. For those working in PR and communications, the opportunity is to help partners tell a story that positions them as trusted advisors across connectivity, security and cloud - not as resellers of individual products. If you're developing skills in this area, AI for PR & Communications courses can help you understand how AI tools are reshaping both the message and the medium. And as AI Agents & Automation begin to handle more transactional sales and customer service, the value of human expertise in complex, multi-product deals becomes a stronger story to tell - not a weaker one.
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