Telecoms enters the final quarter of 2026 in better financial health than at any point since the 5G build began, and with less clarity about where growth will come from. Shareholder returns have recovered, capital spending is falling and balance sheets are being reshaped. Yet the core connectivity business is growing at roughly the rate of inflation, and the industry’s largest bets of the past decade have not yet produced a step-change in revenue per user.
Revenue: large, steady and slow
Omdia estimates that global connectivity revenues across mobile, fixed broadband and fixed voice reached about $1.3 trillion in 2025, up 4% year on year, with fourth-quarter revenue of $333 billion growing 5%1. The volume story is healthier than the value story: 5G connections passed three billion, up 34%, and fibre connections grew 7% to about 1.17 billion1. Omdia’s own assessment is that the sector has ‘yet to realise meaningful returns from investments in new technologies’1.
GSMA Intelligence reaches the same conclusion from the mobile side. Its review of 5G’s commercial record finds that operator revenue growth has remained modest and largely flat since launch, below 5%, and that ‘technology alone does not guarantee financial sustainability’6. Forecasts are no more generous: Dell’Oro expects carrier revenues to grow at a compound rate of about 2%2.
Returns: above the cost of equity, unevenly
The more encouraging news is in the equity market. BCG’s 2026 Telco Value Creators analysis finds that the 63 telcos it tracks delivered a median annualised total shareholder return (TSR) of about 9% over 2021–2025, up from 4% a year earlier and above the sector’s cost of equity of roughly 6.5%3. Nine companies now post a TSR of 20% or more, against three a year ago, and telecoms has climbed ten places to 21st of 33 sectors3.
Returns have recovered, but not for every business model
Median five-year annualised TSR by telco archetype, 2021–2025, %, versus sector cost of equity (%)
Note: Cost of equity is BCG’s approximate average across mobile and service telecommunications. ‘All 63 telcos’ is described as ‘about 9%’.
Source: Boston Consulting Group, “Telcos’ New Paths to Value in the AI Era” (2026)
Three caveats matter. First, BCG attributes the recovery partly to consolidation and more rational pricing and partly to buoyant non-US equity markets, not to AI, which it says ‘has not triggered an investor rerating for telcos’3. Second, dispersion is widening: the top 20 operators generate about three times the median TSR of the remaining sample, and absolute value creation fell to $616 billion over five years from nearly $700 billion3. Third, whether European operators earn their cost of capital is still contested. Economists at the European Commission’s competition directorate, writing in a personal capacity and analysing 14 large EU integrated operators over 2014–2024, find aggregate return on capital employed at or above the weighted average cost of capital in most years, dipping below mainly in 2014–2015 and during the heavy fibre and 5G investment of 2020–2021, with wide variation between firms4.
Capex: past the peak
The capex cycle has turned. Omdia puts 2025 global capex at $303 billion, down 2% after a 3.5% decline in 20241. Dell’Oro, which tracks around 50 providers representing roughly 80% of global capex, estimates that spending was flat in 2025 in nominal dollar terms and projects a 2% decline in 2026, followed by compound growth of just 1% a year to 20302. It expects the capex-to-revenue ratio to approach 14% by 2029, and wireless capital intensity to approach 11%, seven percentage points below the 5G peak2.
Lower intensity is not the same as lower need. GSMA estimates that Europe requires €475 billion of mobile investment over the next decade to close its 5G gap, of which only about €270 billion is expected to be available to operators5. Europe’s standalone 5G share shows the consequence: about 3% of connections, compared with around 80% in China, 50% in India and 30% in the United States5.
Europe’s investment gap shows up in 5G standalone adoption
Share of connections on 5G standalone networks, %, 2026 (%)
Note: China, India and US figures are described as approximate (‘around’).
Globally, the envelope is large but flattening. GSMA Intelligence estimates that mobile operators will invest about $1.5 trillion through 2030, most of it in 5G, with annual spending expected to plateau rather than resume the growth of the early deployment years9. A growing share of that envelope is being redirected: operators in China, South Korea and Japan in particular are putting capital into AI computing, cloud and enterprise platforms alongside radio networks9. For the rest of the industry, the question is whether falling capital intensity is freeing cash for such bets, or simply being absorbed by debt service and dividends.
Infrastructure: the asset-sale trade reverses
For a decade, operators monetised towers and fibre to fund 5G and reduce debt. The investment case for standalone infrastructure now looks weaker. BCG finds that infrastructure companies, asset-heavy spinouts sensitive to interest rates, returned −4% TSR over five years as investors moved back towards integrated operators3. In February, a large pan-African operator agreed to buy the 75.3% of its former tower company that it did not already own, at an enterprise value of about $6.2 billion, bringing nearly 29,000 African towers back under its control8. Its rationale, internalising lease margins and managing currency, inflation and energy risk, suggests that control of passive infrastructure is being re-priced, at least in volatile markets8.
Consolidation: scale as strategy
Consolidation is the other lever. A GSMA Intelligence study published in July, commissioned by the industry body, finds that operators in three-player European markets invested around 48% more than those in four-player markets over the past decade, with users seeing speeds around 15% faster and no evidence of price rises5. Competition authorities have not accepted that argument wholesale, and France is the test case: in June, three domestic operators agreed a €20.45 billion ($23.5 billion) joint deal to acquire and divide the country’s second-largest operator, a transaction that would reduce the market from four mobile network operators to three7. EU regulators have historically imposed tough remedies on, or blocked, such deals7.
What separates the leaders
BCG’s leaders combine cost and capex discipline with exposure to faster-growing markets, and several mature-market operators have delivered five-year TSR of roughly 15–17% through disciplined execution3. The next differentiator, BCG argues, is CEO-led redesign of end-to-end processes rather than isolated AI cost-cutting3. That points to a practical agenda for 2027 planning: treat capital intensity as a managed variable, rebuild the case for owning or leasing infrastructure asset by asset, and prepare arguments for scale that rest on investment and quality outcomes rather than on operator counts.