Telecom Industry Seeks Reinvention Amid Slow Revenue Growth, AI Disruption, and 5G Expansion
The global telecoms industry recorded a 4.3% revenue increase in 2023, reaching $1.1 trillion, but long-term growth remains sluggish, with a projected compound annual growth rate (CAGR) of just 2.9% through 2028, according to PwC’s Global Telecoms Outlook released ahead of Mobile World Congress in Barcelona.
Despite increasing service adoption, average revenue per unit (ARPU) is expected to decline by 2% annually across mobile, broadband, and voice services due to mounting competition, rising costs, and geopolitical uncertainties. While 5G subscriptions are set to quadruple from 1.79 billion in 2023 to 7.51 billion by 2028, 5G revenue generation remains muted, reflecting slower-than-expected monetization.
Key Industry Trends:
- 5G’s Growth Surge: By 2028, 64.1% of mobile subscriptions will be 5G, up from 18.8% in 2023, making it the dominant standard by 2026.
- IoT Boom in Automotive Sector: Cellular IoT revenue will more than double to $34.1 billion by 2028, driven by smart vehicle adoption.
- Fixed Connectivity Takes Priority: Despite a 2.3% telecom CapEx drop in 2023, investments in fiber networks and fixed broadband are projected to grow at 2.4% CAGR, with preparations already underway for 6G.
Dr. Florian Gröne, PwC’s Global Telecoms Leader, emphasized that the industry must reimagine its value creation to stay competitive. “While telecoms hold enormous potential in a digital-first world, high operational costs and macroeconomic pressures threaten profitability,” he noted.
AI as a Telecom Game-Changer
With AI reshaping industries, telecom operators must accelerate AI adoption to optimize network efficiency, personalize customer experiences, and cut costs. Wilson Chow, PwC’s Global TMT Lead, highlighted AI’s transformative potential:
“Telecoms players must move swiftly to leverage AI or risk falling behind. The industry is uniquely positioned to lead the next wave of digital infrastructure—what we call the ‘AI grid.’”
The Road Ahead:
To remain competitive, the telecom sector must embrace AI-driven digital infrastructure, expand fixed broadband investments, and navigate complex regulatory landscapes. While $200 billion in incremental revenue growth is up for grabs by 2028, industry players must act decisively to capture emerging opportunities in 5G, IoT, and AI-powered connectivity.
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