IDC report: Telecom Operators Turn to AI to Boost EBITDA Margins
Worldwide spending on telecommunication and pay TV services will reach $1,532 billion in 2025, representing an increase of +1.7% year-on-year, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. The latest forecast is slightly more optimistic compared to the forecast published earlier this year, as it assumes a 0.1 percentage point higher growth of the total market value.
“The regional dynamics remain mixed, with inflationary effects, competition, and Average Revenue per User (ARPU) trends playing a central role in shaping market trajectories,” says Kresimir Alic, research director, Worldwide Telecom Services at IDC.
Global telecom operators are strategically adopting AI to drive significant business improvements across several key areas. The integration of AI technology is enhancing network operations, refining customer service interactions, and strengthening fraud prevention mechanisms which are reduce losses, reinforcing customer trust and regulatory compliance. With AI accelerating time-to-market for new services, telecoms can better monetize emerging technologies like 5G and edge computing.
“In the longer term, as AI continues to evolve, it will be increasingly recognized not as a mere technological enhancement, but as a strategic enabler poised to drive sustainable growth for telecommunications operators,” according to the report. This strategic adoption is accelerating time-to-market for new services, enabling better monetization of technologies like 5G and edge computing. It represents cautious optimism for a global connectivity services market that has been stagnant for many years.
- Network Planning and Operations: AI is heavily used to optimize network performance and manage the complexity of modern networks, including 5G and future 6G technologies. This involves:
- Predictive Maintenance: Anticipating hardware failures and network issues to ensure uninterrupted service and reduce downtime.
- Automation and Orchestration: Automating complex tasks and managing physical, virtual, and containerized network functions.
- Energy Efficiency: Making intelligent choices about radio access network (RAN) energy consumption and resource allocation to increase efficiency.
- Customer Experience (CX) and Service: Enhancing customer engagement and service is a top priority. This is achieved through:
- Personalized Services: Analyzing customer behavior and preferences to offer tailored products and marketing campaigns.
- Intelligent Virtual Assistants/Chatbots: Automating customer interactions and improving self-service capabilities.
- Churn Reduction: Using AI to predict customer churn and implement retention strategies.
- Business Efficiency and Productivity: Operators are focused on driving agility and productivity across the organization. This includes:
- Employee Productivity: Streamlining workflows and automating tasks using generative AI (GenAI) and agentic AI.
- Cost Reduction: Driving efficiency in operations to lower overall costs.
- Fraud Prevention: Deploying AI-enhanced systems to detect and mitigate fraud, protecting revenue streams and customer trust.
- New Revenue Opportunities: AI is seen as a cornerstone for developing new services, such as AI-as-a-Service, and monetizing existing network assets like 5G capabilities.
| Global Regional Services Revenue and Year-on-Year Growth (revenues in $B) | |||
| Global Region | 2024 Revenue | 2025 Revenue | 25/24
Growth |
| Americas | $568 | $574 | 1.0% |
| Asia/Pacific | $476 | $481 | 1.0% |
| EMEA | $462 | $477 | 3.2% |
| Grand Total | $1,507 | $1,532 | 1.7% |
| Source: IDC Worldwide Semiannual Services Tracker – 1H 2025 | |||
Mobile continues to dominate, driven by rising data consumption and the expansion of M2M applications, which are offsetting declines in traditional voice and messaging revenues.
Fixed data services are also expected to grow steadily, fueled by increasing demand for high-bandwidth connectivity.
In summary, IDC forecasts that the global connectivity services market is projected to grow at a compound annual rate of 1.5% over the next five years, maintaining a cautiously optimistic outlook. As highlighted by recent IMF forecasts, the overall market environment is expected to be less stimulating than in previous years, shaped by rising protectionism and persistent economic uncertainty in key regions. While declining inflation may ease cost pressures, it is also likely to reduce the inflation-driven boost to telecom service spending seen in recent cycles. Political instability in areas such as Eastern Europe and the Middle East adds further complexity to the growth landscape. Most notably, saturation in mature telecom markets continues to be the primary constraint on expansion, limiting upside potential in traditional service segments.
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About IDC Trackers:
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.
For more information about IDC’s Worldwide Semiannual Telecom Services Tracker, please contact Kathy Nagamine at 650-350-6423 or [email protected].
About IDC:
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,000 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 100 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is the world’s leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.
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