Telecoms Industry Revenue Rose 4.3 Percent in 2023 to Hit $1.1 Trillion

Global telecoms revenue is projected to rise at a CAGR of 2.9% through 2028, below inflation, even as the sector's total revenue across fixed and mobile verticals rose 4.3% in 2023 to hit $1.1 trillion, according to PwC. The Outlook finds that the telecoms industry faces a sluggish outlook amid rising costs and competition, muted subscriber growth, and lingering macroeconomic and geopolitical pressures.

Despite volume growth in the sector, average revenue per unit (ARPU) is expected to decline an average of 2% annually until 2028, across mobile, fixed broadband, and voice services. But while Outlook points to a challenging environment in need of re-invention, wide variation exists in the growth outlook between services and markets. For instance, fixed broadband and mobile subscriptions are projected to grow annually by 3.8% and 4.3% until 2028, respectively, while fixed voice subscriptions are expected to decline by 1.8%. Across geographies, fixed subscriptions are projected to grow between 0-6% -- with higher growth markets including India (17.2%), Nigeria (9.2%) and Malaysia (9%).

“The telecoms industry must re-imagine how it creates, delivers, and captures value in the face of rising costs and competition. The industry faces enormous potential, particularly as consumers and societal actors increasingly operate across digital platforms and AI drives significant investments in digital connectivity infrastructure, but the industry remains sensitive to macroeconomic forces and is highly cost-intensive, with almost all the cash it generates absorbed by CapEx, dividends and servicing debt. As new and emerging technologies transform sectors, the telecoms industry must harness the power of AI, while working with investors and regulators to optimize market structure and deploy deals to build scale,” said Florian Gröne, Global Telecoms Leader at PwC US.

Despite sluggish uptake in 5G services to date, subscriptions for the service are expected to more than quadruple, from 1.79 billion in 2023 to 7.51 billion in 2028, with its share of total mobile subscriptions more than tripling, from 18.8% in 2023 to 64.1% in 2028. At this rate, 5G is expected to become the dominant mobile standard from 2026. One particular application is Fixed-Wireless Access (FWA), projected to be the fastest-growing broadband technology by 2028, rising at a CAGR of 18.3%. Against this backdrop, the momentum of capital is shifting decisively towards fixed connectivity or fiber. In 2023, total telecom capex fell 2.3%, driven by a 5.7% decline in mobile. However, industry capex is projected to grow at a 2.4% CAGR from 2024, fuelled initially by fixed broadband investments for fiber roll-out, and later in the period by a revival in mobile CapEx as operators prepare for 6G.

Driven in large part by the increased adoption of smart automobiles and the mobility sector, cellular internet-of-things (IoT) services have emerged as an industry bright spot across all regions. Overall, IoT revenue in the automotive sector is projected to more than double between 2023 and 2028 to reach US$34.1 billion, rising at a CAGR of 15.8%.

As new and emerging technologies transform the industry, and fuel demand for connectivity services and digital infrastructure and investment, AI presents a significant opportunity for the telecoms industry, but one that remains under-utilized. At the consumer level, AI tools and capabilities can also help telcos deliver personalized customer experiences, boost workforce productivity and deployment, and AI-powered cognitive network operations centers (NOCs) that provide actionable insights and efficiencies in real time.

"Telecom players must accelerate their investment and application of AI technologies if they are to transform their cost base and customer experience. At the same time, the digital infrastructure needed to power the AI economy will also create significant opportunities for utility providers to deliver the next version of the internet – the “AI grid” – and serve the growing demand for connectivity. The telecoms industry is uniquely positioned to lead the way considering their operation at scale, real estate footprint, and expertise on networks, but they must move quickly to ensure first-mover advantages," said Wilson Chow, Global TMT Lead & China AI Leader at PwC China.