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Home » Global Telecoms Revenue to Hit $1.3 Trillion by 2028, but Nigeria’s ARPU Declines Amid Fixed-Line Growth

Global Telecoms Revenue to Hit $1.3 Trillion by 2028, but Nigeria’s ARPU Declines Amid Fixed-Line Growth

…PWC Report

Joan Aimuengheuwa by Joan Aimuengheuwa
March 6, 2025
in Telecoms
0
Global Telecoms Revenue to Hit $1.3 Trillion by 2028, but Nigeria’s ARPU Declines Amid Fixed-Line Growth
Source: Getty Images

Source: Getty Images

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The global telecoms industry is projected to see its total service revenue reach $1.3 trillion by 2028, with a compound annual growth rate (CAGR) of just 2.9%, according to the Global Telecom Outlook 2024-2028. 

This sluggish growth lags behind the global inflation rate, leaving the sector’s long-term profitability being questioned.

Despite an additional $200 billion in potential incremental revenue over the next five years, financial stress on telecom operators doesn’t make this a win.

The industry’s core services—mobile and fixed connectivity—are increasingly commoditised, making price hikes difficult while infrastructure investment stays indispensable.

Fixed broadband services are expected to grow at a CAGR of 3.8%, while mobile subscriptions will rise by 4.3%. However, revenue from fixed voice subscriptions is set to decline by 1.8% annually.

The report highlights sharp differences at a country level, with emerging markets such as Nigeria, India, Egypt, and Kenya experiencing higher growth rates compared to mature economies like Japan and Switzerland.

The outlook for average revenue per user (ARPU) is concerning. Over the next five years, mobile ARPU is forecast to decline at a CAGR of –1.3%, fixed broadband ARPU will remain almost flat at –0.1%, and fixed voice ARPU will drop by –4.7%.

This trend suggests that most new value in the industry will come from subscriber growth rather than higher earnings per customer.

In Nigeria, for example, fixed-line subscriber numbers are projected to rise at a CAGR of 9.8%, but ARPU will decline at –1.4%. Meanwhile, mobile subscribers in the United States are growing at 4.9% annually, yet ARPU is shrinking by –1.5% per year.

The industry’s financial challenges are clearly seen, as nearly all revenue generated is absorbed by capital expenditures, dividends, and debt servicing—leaving little room for innovation.

AI, 5G, and B2B Services as Growth Strategies

With traditional telecom services facing profitability challenges, operators are looking to emerging technologies and business segments for revenue opportunities.

Artificial intelligence (AI) is becoming an essential tool in customer service, operational efficiency, and network management. AT&T, for instance, has implemented its generative AI platform, “Ask AT&T,” which has cut software development time by 10-30% and reduced call times for customer service agents.

Meanwhile, 5G adoption is expanding rapidly. Global 5G subscriptions are expected to surge from 1.79 billion in 2023 to 7.51 billion by 2028, with its share of total mobile subscriptions increasing from 18.8% to 64.1%. However, monetisation remains a challenge.

Fixed wireless access (FWA) broadband is emerging as a promising use case, particularly in countries like the US, Saudi Arabia, South Africa, and China, where it could help bridge the digital divide between urban and rural areas.

FWA subscriptions are forecast to grow at an 18.3% CAGR, yet they will still account for only 6% of the total broadband market by 2028.

The business-to-business (B2B) sector is also becoming a priority for telecom firms, as price erosion in basic connectivity services accelerates. Companies are tailoring industry-specific solutions, such as Internet of Things (IoT) services, cybersecurity, and private 5G networks.

Saudi Telecom Company (STC), for example, is leveraging its subsidiaries to expand beyond connectivity into cloud computing, cybersecurity, and IoT, securing major contracts with firms like Aramco.

IoT and Private 5G Networks Drive Enterprise Innovation

IoT services are witnessing moderate growth, with the automotive industry leading adoption. Electric vehicles, which function as mobile data centres, are driving a surge in automotive IoT revenue, expected to grow at a 15.8% CAGR to $34.1 billion by 2028.

Meanwhile, industries with large-scale infrastructure—such as mining, ports, and energy—are investing in private 5G networks for remote monitoring and automation.

Manufacturers are also adopting cellular IoT for more flexible factory layouts, as wireless networks eliminate the need for constant rewiring. The most significant growth in IoT revenue will come from application enablement platforms, which are projected to expand at a 23.9% CAGR to $83.1 billion by 2028.

Balancing Investment and Profitability

While global telecom revenues are set to rise over the next five years, the industry is still constrained by high costs and slow ARPU growth.

The challenge for telecom operators will be to strike a balance between infrastructure investment and profitability. New technologies like AI, 5G, and IoT bring opportunities for revenue diversification, but companies must find ways to monetise these advancements effectively.

The coming years will determine whether telecom firms can evolve beyond basic connectivity providers into full-scale digital service providers, unlocking new value in an increasingly connected world.

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