Global Telcos’ imperative
The global telecom industry is undergoing a fundamental transformation, shaped by financial shifts, technological advancements, and consolidation through M&A activity. The report “Global Telcos’ Imperative” offers a data-driven analysis of 30 strategically selected global telcos, providing insights into the performance of telecom operators across the region.
The report dissects financial trends, operational efficiencies, and investment strategies that define telco success in a rapidly evolving digital ecosystem. Mergers and acquisitions are playing a pivotal role, with telecom giants consolidating to achieve scale, drive synergies, and enhance competitiveness.
As AI reshapes industries, telcos are rapidly integrating intelligent automation, network optimization, and predictive analytics to drive efficiency and customer engagement. The report highlights how AI is no longer optional but essential for telcos seeking to sustain profitability and future-proof their business models.
Key highlights
Industry revenue showed a 1.9% expansion YoY for 9M-2024, surpassing 2023’s 1.1%, led by tariff adjustments and 5G-driven data consumption
- The industry achieved an aggregate revenue of USD 975.6 billion for 9M-2024.
- Key factors driving stable growth includes Increased data consumption led by growth in 4G/5G subscribers, Strategic pricing increments in select countries like India, and Growth in Enterprise and Beyond-connectivity segments.
- Indian telecom operators deliver strong performance in the mobility segment, driven by strategic tariff increases and an expanding subscriber base.
- Middle Eastern telecom operators demonstrate revenue growth, leveraging increased data service demand and supported by the ongoing expansion of 4G and 5G networks.
- North American and European telcos leverage FWA and FTTH as pivotal growth drivers.
- Telcos like MTN, Telefonica, and Telenor face revenue declines, primarily attributed to geography-specific challenges like currency devaluation, thereby impacting overall revenue momentum.
Revenue momentum, operational improvements, and cost optimization stabilize EBITDA margins at 34% level
- The leading 30 telcos maintain a stable average EBITDA margin of 34.9% for 9M-2024, reflecting a slight improvement from 34.6% in 9M-2023.
- Revenue expansion, alongside operational improvements and increased cost savings, underpins the stability in EBITDA margins.
- Nearly 73% of the telcos record positive change in EBITDA in 9M-2024.
Global CAPEX spending demonstrated a continued decline for 9M-2024, reflecting a strategic shift in investment priorities
- CAPEX declined for nearly 58% of the telcos for 9M-2024.
- Maturing 4G/5G networks in the US, India, China, and Europe reported reduced CAPEX spending, indicating a shift to efficiency.
- Middle East and Africa telecom operators maintain CAPEX momentum, primarily driven by ongoing 4G and 5G network deployments.
- Telcos such as SK Telecom, KT Corp, Softbank, and Singtel focus on key growth areas, including data centers, cybersecurity, and AI-related investments.
- Chinese telcos, having undertaken substantial 5G investments, now prioritize enhancing digital capabilities with an emphasis on cloud, big data, IoT, and commercial 5G projects such as smart cities, factories, and parks.
Average ARPU remains stable at USD 22.4 for 9M-2024, with Indian telcos benefiting from tariff hikes, while developed markets see stagnation
- Indian telecom operators demonstrate significant ARPU expansion, driven by tariff hikes implemented in mid-2024.
- Developed market telcos encounter marginal ARPU contraction, attributed to heightened competitive dynamics impacting their revenue streams.
- North American telcos leverage growth in postpaid subscriber counts and ARPU to achieve revenue expansion.
Enterprise revenue reached 20.9% of total revenue in 9M-2024, with 53% of telcos surpassing this benchmark contribution
- Telcos strategically expand service offerings to include a comprehensive ICT portfolio, capitalizing on the increasing reliance on enterprise technology.
- The average enterprise revenue contributed 20.9% of total telecom revenue in 9M-2024 reaching USD 150.7 billion, underscoring its growing strategic importance.
- Chinese telecom operators demonstrate robust enterprise revenue momentum, expanding by USD 4.3 billion YoY for 9M-2024, with China Mobile leading this growth trajectory.
Beyond-Connectivity revenue grew to 24.5% in 9M-2024 from 23.4% in 9M-2023, highlighting its growing revenue contribution
- Approximately 61% of the 18 telcos analysed achieved Beyond-Connectivity contributions surpassing the 24.5% average benchmark.
- The leading telecom operators attained 7.3% YoY growth in Beyond Connectivity revenue for 9M-2024, reaching USD 146.9 billion, in contrast to an overall revenue expansion of 2.3% YoY, totaling around USD 599.2 billion.
- Chinese telcos leverage digital transformation services as the primary driver of their “Beyond Connectivity” revenue, while SoftBank’s financial services underpin its revenue momentum in Japan.
M&A synergies reshape the telecom landscape, reducing pricing pressure and supporting digital infrastructure investments
- M&As continue to redefine the global telecom landscape, with APAC region buzzing with M&A deals.
- Telstra completed the acquisition of Boost Mobile for USD 94.1 million (AUD 145 million).
- Telefónica and Allianz’s joint venture UGG secured regulatory clearance to acquire Infrafibre Germany (IFG), enhancing rural fiber coverage in Germany.
- América Móvil finalized the acquisition of a 91.72% stake in Chile JV ClaroVTR, consolidating its position as a leading telecom provider in Chile.
- MobileOne (M1) acquired a 70% stake in ADG for USD 28.4 million (VND719.9 billion) to expand in Vietnam’s tech sector.
- Optus announced to sell Uecomm to ISP Superloop for USD 11.3 million (AUD 17.5 million).
- XL Axiata and Smartfren announced to merge to create a combined entity with an enterprise value of USD 6.5 billion (IDR 104 trillion).
AI integration accelerates innovation and efficiency for leading telcos, proving its strategic value
Telcos leverage AI to enhance customer experience
- Ooredoo launched AI Hub in partnership with Infobip and Microsoft, to enhance customer experience using advanced conversational AI.
- Telefonica launched a generative AI platform to create customizable virtual assistants aimed at enhancing customer service experiences.
- Batelco launched “Basma”, an AI-powered digital assistant, to enhance customer service through 24/7 availability on its app and website.
Telcos enhance operations and boost efficiency with AI adoption
- Verizon launched “Verizon AI Connect” to manage AI workloads, for addressing growing demands for network capacity and computational power.
- Zain Jordan deployed an OpenAI chatbot to improve document management, boosting accessibility and efficiency.
- Telenor launched “AI Factory” leveraging NVIDIA’s full-stack AI computing platform. with Hive Autonomy as its first customer.
Telcos leverage AI-Powered service enhancements and efficiency gains
- Softbank partnered with Ericsson to explore AI integration with RAN to enhance network efficiency.
- Verizon integrated AI and machine learning techniques to enhance fibre network protection and prevent accidental fibre cuts.
- Ooredoo partnered with DDN to enhance AI and digital transformation capabilities through advanced data solutions.
Click here for more contents on telecom
Telecom Digital Odyssey-Navigating the AI-powered future