The global telecom services market saw a modest increase in spending in 2024, driven by inflation caused by new tariffs, according to market intelligence firm International Data Corp. (IDC). Both households and businesses spent more on telecom services as price hikes made them allocate more of their budgets to essential communication needs.
IDC reported that worldwide spending on telecom and pay TV services reached $1,510 billion in 2024, showing a 2.2% year-on-year rise. For 2025, IDC projects a smaller increase of 1.6%, bringing the total to $1,535 billion.
“Our latest forecast for the telecom services market is slightly less optimistic compared to the version published in November last year, projecting slower growth in 2025 by 0.9 of a percentage point,” IDC said.
Slower growth ahead despite recovery
The effects of inflation were more noticeable in Europe and North America. Customers in these regions, with generally higher incomes, were less likely to switch to cheaper plans or cancel services. Asia Pacific’s growth slowed after a strong recovery in 2022 and 2023.
IDC noted that inflation is starting to ease in many countries, and its impact on telecom spending will likely weaken. However, the telecom industry continues to undergo major changes aimed at improving service and staying competitive.
AI is playing a bigger role in improving customer support and making operations more efficient. Investments in 5G infrastructure are ongoing, with telecom companies working on increasing network coverage and forming partnerships. The expansion of fiber-optic networks and Low Earth Orbit (LEO) satellites is also increasing competition and improving internet access in more areas.
Tech upgrades, AI, and new networks
Operators are focusing less on traditional voice and data services. Instead, they are moving toward digital solutions using cloud-native tools, AI, and edge computing.
“A significant factor that could influence the market landscape includes the tariffs announced and partially imposed by the new US administration,” IDC noted.
While the direct effects on telecom services are expected to be small, there could be wider economic impacts.
“Tariffs on telecommunications equipment might lead to increased costs for telecom operators, potentially delaying 5G rollouts and AI projects; although, in the longer term, potential downsides may include further economic deterioration and reduced purchasing power due to a new wave of inflation,” said Mark Walker, vice-president, Worldwide Telecoms Data and Analytics at IDC.
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