According to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker, global expenditures on telecommunications and pay-TV services are expected to reach US$1,532 billion by 2025, reflecting a year-on-year growth of +1.7%. This forecast is slightly more optimistic than earlier predictions made this year, with a 0.1 percentage point increase in the anticipated growth rate of the overall market.
Kresimir Alic, Research Director for Worldwide Telecom Services at IDC, notes that regional dynamics are varied, influenced by factors such as inflation, competition, and trends in Average Revenue per User (ARPU), which are pivotal in shaping the market’s future.
The analysis of various telecom service types reveals that established trends are still relevant, even as overall market expectations are adjusted. Mobile services continue to lead the market, driven by surging data consumption and the expansion of machine-to-machine (M2M) applications, which are compensating for declines in conventional voice and messaging revenue.
Fixed data services are also projected to grow steadily, spurred by rising demand for high-bandwidth connectivity. However, spending on fixed voice services is expected to decline further, as losses from traditional time-division multiplexing (TDM) voice services are not offset by gains in Internet Protocol (IP) voice. Although the conventional pay-TV segment is expected to shrink slightly due to the emergence of Video-on-Demand (VoD) and Over-The-Top (OTT) platforms, these services will remain integral to telecom providers’ bundled offerings worldwide.
The global market for connectivity services is forecasted to grow at a compound annual growth rate of 1.5% over the next five years, suggesting a cautiously optimistic outlook. The International Monetary Fund (IMF) indicates that the overall market environment will likely be less invigorating than in previous years, due to growing protectionism and ongoing economic uncertainties in key regions.
Though declining inflation might alleviate some cost pressures, it is also expected to dampen the inflation-driven upsurge in telecom spending seen in recent cycles. Political instability in regions such as Eastern Europe and the Middle East further complicates the growth scenario. Particularly in mature telecom markets, saturation remains the primary barrier to expansion, constraining potential growth in traditional service offerings.
“Our outlook for the telecom market in the Asia Pacific region has been subtly downgraded, reflecting the economic uncertainty in key countries like China, Japan, and Indonesia,” remarks Alic. Conversely, India is demonstrating remarkable performance, with significant growth in mobile ARPUs pushing the market towards double-digit growth, alleviating regional value losses.
In North America, forecasts remain largely unchanged, with slight upward adjustments anticipated in major Latin American markets. The EMEA region has experienced only marginal reductions in its projections. However, it is still expected to outpace other areas, primarily driven by hyperinflation in countries like Turkey, Egypt, and Nigeria, which are witnessing nominal growth rates in the high double digits.”
In this climate, operators are anticipated to prioritise margin enhancement, operational efficiency, and the monetisation of emerging technologies to maintain shareholder value. Leading telecommunications companies are increasingly implementing artificial intelligence (AI) across network operations, customer support, and fraud prevention to improve efficiency and reduce costs.
These initiatives are already contributing to growth in EBITDA margins, with predictive maintenance and automated support systems paving the way. AI is also enabling personalised offerings and dynamic pricing, boosting ARPU and reducing customer churn. Innovations in AI-powered fraud detection are helping to minimise losses, strengthen customer trust, and ensure regulatory compliance.
By accelerating the time-to-market for new services, telecoms can better monetise emerging technologies such as 5G and edge computing. In the long run, as AI technology continues to evolve, it will be recognised not just as a technological enhancement but as a strategic enabler that can foster sustainable growth for telecommunications operators.
