The global telecommunications industry is on track to generate $1.3 trillion in revenue by 2028, according to PwC’s latest Global Telecom Outlook report. Despite facing sluggish growth and pricing challenges, the sector continues to show resilience, driven by increasing mobile subscriptions and steady demand for broadband services.
In 2023, the industry saw a 4.3% increase in total service revenue, reaching $1.14 trillion. However, PwC predicts that growth will slow in the coming years, with a compound annual growth rate (CAGR) of just 2.9% through 2028. This rate falls below the projected inflation rate, indicating that the industry will face ongoing pressure to innovate and adapt.
Nigeria Emerges as a Key Growth Market
Among the standout performers, Nigeria’s telecommunications sector has shown remarkable progress, with mobile service revenue hitting $7.6 billion in 2024. The country is expected to maintain an 8% CAGR between 2023 and 2028, making it one of the fastest-growing telecom markets globally.
This growth is primarily fueled by a surge in mobile subscriptions rather than higher average revenue per user (ARPU). According to the report, fixed-line ARPU in Nigeria is projected to decline at a CAGR of -1.4%, while subscriber numbers are expected to rise at a CAGR of 9.8%.
Pricing Challenges and Commoditization
A significant hurdle for the telecom industry is the commoditization of its core products and services, which has limited the ability of companies to raise prices. Despite substantial investments in infrastructure, telecom operators are struggling to increase profitability.
“The industry’s core products and services are becoming commodities, making it difficult to raise prices while facing continuous infrastructure investment demands,” the report noted.
Despite these challenges, PwC projects an additional $200 billion in incremental revenue growth by 2028. However, this slow expansion has intensified the need for telecom companies to explore new revenue streams and optimize existing ones.
Regional and Service Variations
The report highlights stark differences in growth across services and regions. Fixed broadband and mobile subscriptions are expected to grow steadily, with CAGRs of 3.8% and 4.3%, respectively, between 2023 and 2028. In contrast, fixed voice subscriptions are projected to decline at a CAGR of -1.8% over the same period.
Emerging markets are leading the charge, with countries like India, Nigeria, Egypt, and Kenya experiencing above-average growth rates. In contrast, mature markets such as Japan and Switzerland are seeing stagnation or decline.
For instance, Colombia leads in mobile revenue growth with a 10.5% CAGR, followed by India and Argentina. Meanwhile, developed markets like Japan and Switzerland are witnessing declines in mobile revenue.
Opportunities Amid Challenges
While the telecom industry faces significant headwinds, the report underscores opportunities for growth, particularly in emerging markets and through innovative service offerings. Companies that can adapt to changing consumer demands and leverage new technologies are likely to thrive in this evolving landscape.
As the industry navigates these challenges, the next five years will be critical for telecom operators to redefine their strategies and unlock new value in an increasingly competitive market.
