Telecom Services Market 2021-2028 global industry analysis

The global telecom services market size was valued at USD 1.74 billion in 2020 and is expected to grow at USD 2.4 billion by 2027 at a compound annual growth rate (CAGR) of 5.0% from 2020 to 2027. The telecommunications industries within the sector of information and communication technology is made up of all telecommunications/telephone companies and internet service providers and plays the crucial role in the evolution of mobile communications and the information society.

Rising spending on wireless communication infrastructures due to the shift in customer inclination towards cloud-based technology and mobile devices is one of the key factors driving this industry. An increasing number of mobile subscribers, soaring demand for high-speed data connectivity, and growing demand for value-added managed services are the other potential factors fuelling the market growth.

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The global communication network has undoubtedly been one of the prominent areas for continued technological advancements over the past few decades. The industry’s product offering evolved in the late 19th century from only voice and visual signals in terms of facsimile or telegraphs over wired infrastructure to the current scenario of exchanging audio, video, and text content over numerous wireless infrastructures. The market for telecom services has also witnessed significant improvements in data speeds, from Global System for Mobile communications (GSM) and Code Division Multiple Access (CDMA) to Third Generation (3G), Fourth Generation (4G), and now the commercialization of Fifth Generation (5G) networks. The advent of data connectivity has made possible the reduction in the duration of transferring large chunks of data from days to hours and now to a few seconds.

The telecom sector continues to be at the epicentre for growth, innovation, and disruption for virtually any industry. Mobile devices and related broadband connectivity continue to be more and more embedded in the fabric of society today and they are key in driving the momentum around some key trends such as video streaming, Internet of Things (IoT), and mobile payments.

The global market is highly dominated by both international as well as regional players operating within specific expanses. Key companies are investing aggressively in improvising their spectrum so as to ensure high-speed data connectivity to their Products. An inter-industry partnership is a major trend comprehended amongst the players of this industry. For instance, in January 2020, KDDI Corporation collaborated with Toyota Motor North America and AT&T Inc. to enable 4G LTE connectivity for selective new models of Toyota and Lexus cars and trucks.

Some of the prominent players in the telecom services market include: Verizon, AT&T, Inc., China Mobile Limited, Nippon Telegraph and Telephone Corporation, SoftBank Corp

Analyst Commentary

The telecom industry has incredible growth owing to new technologies and recent developments, where new concepts of 5G wireless, IOT, Platform based service (PBS), Cloud computing, Network security, Data centres, OTT, etc., are leading concepts to understand telecommunication verticals. Strategic business plans like content gaining, implementation, product integration, channel distribution, marketing and finally customer service are the basic platform. MMR provide all the development strategies and opportunities, which will help you evaluate the global telecommunication market. For example, value added service (VAS) are widely used by Chinese key players to boost their revenue, cost control and upgrade network to rank highly in current industry. The cellular global mobile connection was about X.XX billion by mid-2020, where the GSM/EDGE family including EGPRS for data connectivity is the dominant Radio Access Network (RAN) in use. GSM has a global market share of more than X8% (corresponding to X.56 billion subscribers), is well beyond peak use and is currently in decline. On the other hand, the number of 3G subscribers including HSPA has risen since 2020 to X.X4 billion subscribers, which represents X6% of the market share. HSPA subscriptions will peak by 2020, and will decrease past that point. The dominant 4G standard, LTE, captured around X80 million subscribers (or X5% of the total market) by the end of 2020 and is expected to reach 4.1 billion subscriptions by 2021, hence making it the largest telecom industry. The main features of the 3GPP standards now in the market.

In today’s digital age, customers favor Over-The-Top (OTT) channels for a variety of reasons, among which the number of viewing options, and the pricing offered are the most prominent ones. The OTT solution providers offer video, audio, and other media over the internet. Usually, they are not bound to price agreements with limited viewing choices to pick from. Common instances of OTT applications are Netflix, Amazon Video, Roku, Facebook, and Google Duo.

The consumers and marketers alike are getting more acquainted with OTT applications and content. Furthermore, smartphone display and sound quality, open-source platforms, super-fast Internet Protocol (IP) networks among other innovative services act as a mobilizing factor to draw more consumers to the OTT providers ‘freemium-based’ business models, thus witnessing an ever-growing adoption rate and boosting the market growth.

As people worldwide struggle with the realities of the COVID-19 pandemic, digital entertainment platforms as well as the global telecom service providers have benefitted from the current scenario due to their industry type and business model. In a current worldwide lockdown scenario, a shift among masses to remote working will fuel the demand for network connectivity and infrastructure. Similarly, the temporary shutdown of multiplexes and other outdoor entertainment avenues due to strict social distancing has shot up the usage of various digital platforms, including social media, gaming, and OTT applications. The mobile voice traffic has also witnessed an upsurge during this period with prominent communication operators reporting an enormous escalation in their voice traffic since the outbreak of the pandemic.

However, the escalating consumption of digital media platforms by global customers has resulted in the sudden demand for higher bandwidths with high-speed connectivity. With the upsurge in consumption of these platforms, the telecom service companies are urging OTT providers to reduce the streaming resolution of their media content. In fact, the Cellular Operators Association of India (COAI) has requested the video streaming providers to reduce their content quality from High Definition (HD) to Standard Definition (SD). To avoid the congestion in internet traffic, especially when most people are working from home and require high bandwidth, some governments are also helping the market for telecom services to ensure the smooth functioning of their data and voice carriers.


By service type, the market for telecom services is bifurcated into basic communication and Value-Added Service (VAS). The VAS segment held the largest revenue share in 2020. The segment includes no-voice offerings such as in-line data processing, online database storage and retrieval, electronic data interchange, email, and voice mail. The upsurge in VAS revenues for the telecom service operators may be credited to the sustained increase in the number of subscribers in the emerging countries and thrust from network operators to offer relevant mobile services.

By transmission, the global market has been categorized into wireless and wireline. While wireline communication involves the transfer of information via twisted pair, coaxial, and optical fibre cables, the wireless method transmits information Over-The-Air (OTA) using transmitters, receivers, and Radio Frequency (RF) waves. The wireline segment captured the largest revenue share of over 60.0% in 2020 and is projected to maintain its lead over the forecast period. This is attributed to a rising number of SMEs and MNCs in countries, including the U.K., U.S., and China, that utilize an extensive network of Public Switched Telephone Network (PSTN) and Integrated Services Digital Network (ISDN).

By product, the global market is classified into mobile data, mobile voice, fixed data, fixed voice, and others. The mobile data segment accounted for the largest revenue share in 2020 and is expected to maintain its lead over the next few years. Increase in the usage of social networking apps, including Instagram and Facebook, upsurge in the adoption of payment platforms, and amplified demand for entertainment through OTT platforms, especially at an all-time high during the COVID-19 pandemic, are anticipated to drive the mobile data segment.

The fixed data segment accounted for a significant revenue share in 2020 and is likely to witness substantial growth over the forecast period. The fixed data communication includes cable fiber-to-the-home, modems, Digital Subscriber Line (DSL), terrestrial fixed wireless broadband, satellite broadband, and other fixed broadband subscriptions for connecting radio and a receiver. Although mobile data solutions are growing at unprecedented rates, fixed data lines are highly preferred by commercial spaces in the automotive, retail, Information Technology (IT), and various other sectors that require an exchange of huge information at a relatively higher bandwidth and lower latency as compared to mobile data.

Based on application, the global market is segmented into residential and commercial sectors. In 2020, the commercial segment accounted for the largest revenue share of the overall communication networks business and is projected to maintain its lead over the forecast period. This may be attributed to the growing emphasis of businesses on the reliability and quality of their data delivery and voice calls with their clients. The MNCs are exceedingly spending on their communication network infrastructure, especially for VAS portfolios, such as video-conferencing, high-security intracompany networks, and corporate calling and texting plans.

The global market by the commercial sector is further bifurcated by type into Small & Medium-sized Businesses (SMBs) and large enterprises. SMBs are likely to foresee exponential growth over the next few years. SMBs with limited internal IT resources are deploying more comprehensive IT infrastructure and are majorly prioritizing speed and mobility, followed by easy to set up and use communication framework. Cisco Systems, Inc., one of the prominent international network infrastructure providers, targets interactions with around 25 SMBs a day to offer its cloud-based collaboration and security systems.

The Asia Pacific captured the largest revenue share in 2020. The region is likely to attract more than half of the new mobile subscribers by 2025 as estimated by GSMA. The regional market is primarily driven by e-commerce and retailer buy-in platforms, smartphone ubiquity, and investments in 5G networks. China, Japan, and India have emerged as significant contributors to regional market growth.

According to the statistics published by Our World in Data, China and India were ranked among the top internet users worldwide with 765 million and 391 million users respectively in 2017. Furthermore, rising government initiatives on digital integration through Information Communication Technologies (ICT) are anticipated to fuel the communication network growth in the Asia Pacific. For instance, the Indian government spent over USD 600 million on the development of 100 smart city projects, where IoT plays a vital role in those cities qualifying as ‘smart cities’.

The Middle East and Africa is envisioned to witness the highest growth over the forecast period. This can be attributed to the abrupt migration of existing 2G subscribers to mobile broadband networks and the adoption of 3G as well as 4G networks by younger demographics from the outset. Rising deployment of big data solutions to track and respond to issues relating to disease outbreaks, urban planning, and monitoring air pollution levels is anticipated to contribute to the substantial progression of communication networks in the region.

North America is expected to account for a considerable revenue share in the years to come on account of high consumer spending on mobile phones, coupled with the early adoption of digitized technologies. The current launch of 5G in South Korea, Australia, Germany, the U.K., and the U.S. is anticipated to drive the market. According to GSMA, 20.0% of communication connections worldwide will incorporate 5G networks by 2025 with a strong presence in North America and Europe.

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