Historically, telecommunications is not an industry that can always be described as “rapidly changing”. Innovation comes in waves and bursts. From evolving regulatory requirements to competition from advanced transmission technology, and emerging new business models, the time is now to think ahead and be prepared for a quickly changing environment, driven by new technologies. Today is certainly an inflection point in the sector.
5G Deployment and Beyond
The wide rollout of 5G networks globally is a hallmark of a changing telecoms landscape. The high-speeds, ultra-low latency and massive device connectivity of the 5G networks challenges fixed line networks on cost and reliability. As 5G takes its foothold, 2025 arguably marks the year of the “tipping-point” of the technology, as it matures in Europe, the US and parts of Asia. But the effects have not been felt yet. Much like the launch of the original iPhone in 2007 paved the way for a host of technologies like ride-share, social media and mobile payments, the full effects of a wide, fast, reliable 5G network are yet to be fully realized.
5G penetration rates differ globally, with China’s infrastructure leading the way. Source: Ericsson Mobility Report 2025
Beyond 5G, the promise of further advancement into 6G means that the sector is still likely to experience further exponential growth in the coming years. Fixed-line broadband services face the prospect of intense competition and a growth slowdown. While the IoT benefits are often touted, the true technological innovations of the 5G era are yet to be understood, just like the iPhone led to growth in unexpected directions.
Prediction #1 We have only seen the tip of the iceberg of 5G’s impact, and 2025 will mark the turning point
The Shape of Business: Convergence of Media and Telecoms
While research & hard technology drives ahead, the surrounding business context has been anything but static. Macro-trends like the convergence of digital services and telecoms are likely to continue and amplify. The 2010’s saw telecoms companies in many markets continuing their alignment with media services, streaming platforms, film production and sports broadcasting. In 2025, the push steps more toward cloud providers and cloud infrastructure. Tech giants like Amazon are well-positioned to make moves in the sector.
So the overall trend continues. Increased competition, and difficulty in retaining a full vertical control on the physical infrastructure will lead to increased competition, particularly in less mature markets. Technologies such as satellite internet & 6G have potential to further undercut and undermine the core business model of incumbents operators. Telco giants in competitive markets are approaching this new world proactively, but the Amazon question is one that’s yet to be answered.
Prediction #2 US tech giants will make significant impact on the Telecoms value chain before 2030
Changing Regulatory Environment
In line with the increasing deployment of technology at scale, and the evolving business context, regulators have to adapt. If Telefónica adopts a new method of analyzing its finances or network, such as detailed scenario analysis in cost modeling, or real-time network performance analytics, then regulators would be wise to follow-suit and deploy the same tools as the operator.
CostPerform, as the market leader of cost modeling software in telecoms, has observed this trend of the importance of matching technologies first-hand. Regulators are eager to follow-suit after the adoption of a new technology by an operator, or even lead the way in tool adoption. To continue their mission of enforcing competition, preventing margin squeezing, and overseeing spectrum allocation in the telecoms sector.
Prediction #3 The FCC, BEREC, Ofcom and beyond will shift increasingly to real-time regulation and predictive oversight
Europe’s Telecoms at a Crossroads
Both operators and regulators will face a host of new metrics and KPI’s to reach for in the years to come. In the EU in particular, the Draghi Report, specifically addresses the difficulties ahead for the Telecoms sector. The report highlights the need for new investment in telecoms technology and infrastructure, largely driven by cross-border mergers within the EU. This aligns with Draghi’s overall calls for reducing barriers to commerce in Europe.
In order to incentivize this investment, the sector needs to be brought to better profitability, according to the report. The picture of Europe’s telecoms industry as fragmented, with dozens of major companies constrained within national borders, is hard to argue against. China and the US have far fewer internal barriers to trade. Better EU-wide market consolidation, standardized regulations and fair cost sharing would go a long way toward realizing the visions, but politics will make the journey a difficult one.
Prediction #4 Consolidation in the European telecoms sector will increase, with major mergers to come by 2030
The Future of Telco: Technology, Convergence and Infrastructure
In the telecoms sector, innovation comes in waves and phases, and the years ahead are primed for significant changes. Incumbents will face new competition, and the allure of mergers will be increasingly tempting. Silicon Valley and Brussels will each want to leave their handprint on the new telecoms world. For those of us in the sector, opportunity abounds and a changing landscape will generate plenty of opportunity for growth.
Prediction #1 We have only seen the tip of the iceberg of 5G’s impact, and 2025 will mark the turning point
Prediction #2 US tech giants will make significant impact on the Telecoms value chain before 2030
Prediction #3 The FCC, BEREC, Ofcom and beyond will shift increasingly to real-time regulation and predictive oversight
Prediction #4 Consolidation in the European telecoms sector will increase, with major mergers to come by 2030
