2026 Global Telecommunications Industry Outlook

Telecom “fast facts”

Below, we’ve put together some “fast facts” that provide an overview of some important statistics that make up this critical—but sometimes underappreciated—industry:

• Telco stocks were up 15% in 2025, slightly less than the S&P 500 (18%) but well behind the NASDAQ (21%).¹ North American telcos were down 2%, while Latin American and Caribbean telcos were up about 38%, with Asia Pacific increasing by 18% and Europe, the Middle East, and Africa by 28% to 30%.²
• Globally, the telecommunications industry is expected to generate revenue of about US$1.55 trillion in 2025, up roughly 1.7% from the prior year.³ By market cap, the sector is worth about US$3.1 trillion globally (figure 1).

Next-gen flanker brands are emerging as growth engines

Flanker brands are helping protect and enhance portfolio economics, stabilize markets, and support expansion across mobile, broadband, and evolving digital services

Across global telecom markets, a quiet shift is underway. Brand extensions that once played a relatively limited supporting role have become important tools for helping connect with price-sensitive customers, adding new digital services and features, and dealing with growing competitive pressures. Operators are now typically relying on these secondary brands to test new propositions, manage churn, and protect their flagship identities, often with leaner, more agile models than before.

A flanker brand is defined as “a new brand that is introduced into a category by a company and is designed to capture a different segment, with little overlap in consumers’ perception of the existing brand.”⁷ In the telecom space, flanker brands have existed since the mid-2000s,⁸ with Canadian telcos pioneering this strategy.⁹

Historically, telco flanker brands were positioned as low-price, low-feature brand extensions of flagship brands. As a result, they were often seen mainly as “discount” single-product brands and tended to make up a lower percentage of revenue than of subscribers. They frequently competed not with the carrier’s flagship brand, but with low-cost carriers and mobile virtual network operators. Further, they also tended to exhibit higher churn and lower margins.¹⁰

More recently, however, the role and design of flanker brands have evolved.¹¹ A defining characteristic of modern flanker brands is business-model simplicity.¹² What once differentiated flankers primarily as prepaid offerings has evolved into transparent, single-line pricing, fewer add-ons, and what-you-see-is-what-you-pay propositions,¹³ while also providing operators with low-risk environments to test new digital experiences, pricing models, and operating approaches before selectively scaling them across the broader portfolio.¹⁴

Flanker strategies can also carry risks that require careful management. Maintaining multiple brands can dilute marketing spending, fragment brand investment, and increase organizational complexity if roles are not clearly defined,¹⁵ making it essential for operators to tightly constrain flanker scope, channels, and propositions to avoid internal cannibalization.¹⁶

That said, flankers are widely used: over half of Western European mobile network operators use them, and they are about 10% of the subscriber base on average.¹⁷ But in some markets, flankers make up a more significant portion of both subscribers and revenue. In Canada, flankers account for 24% of revenues and 30% of subscribers for major carriers. In Switzerland, flankers account for 30% to 40% of the base,¹⁸ and in some developing world markets, they represent up to 23% of subscribers only 12 months after launch.¹⁹ While low-cost flankers are the single biggest category globally, other categories together account for roughly twice as many offerings (figure 3).

The future of B2B in telecom is moving “beyond connectivity”

A trillion-dollar opportunity beckons telecoms, though competing with hyperscalers and managing complex solutions will likely be challenging

On average, telecom companies generate about 70% of their revenues from consumers and 30% from businesses.²⁵ Of those B2B revenues, about 70% come from providing connectivity services,²⁶ but some speculate that telcos could provide significant “beyond connectivity” services (such as AI, cybersecurity, and cloud platforms) to the B2B market. Success in this market could provide telecoms with a growth lever that would help them grow faster than the low single-digit growth of their core business-to-consumer markets.²⁷ One estimate suggests that the core telecoms B2B market will be about US$270 billion in 2026 with low growth, while the tech services beyond that exceed US$1.7 trillion and are growing at double-digit rates through 2030 (figure 4).²⁸ To be clear, only a portion of that market is potentially addressable by telecoms, and it’s worth about US$620 billion in 2026.²⁹

Reconnecting with the customer: Restoring customer satisfaction and loyalty in telecom

Telecom operators enter 2026 amid eroding customer satisfaction and loyalty, needing a shift from utility-driven offerings to valued, relevant, and emotionally resonant experiences

Telecommunications companies are rethinking loyalty, although adoption remains uneven across markets, particularly in the United States.⁴² In parts of Asia and Europe, however, operators are moving beyond traditional discounts toward ecosystem-based models that integrate digital services, lifestyle benefits, and personalized engagement.⁴³ The priority is sustained, relevant engagement that frames every customer interaction as part of a unified relationship. Through hyper-personalization and seamless connectivity, operators are hoping to restore trust and deepen long-term commitment.

Over the past decade, operators have focused on network expansion and speed as their primary differentiation levers.⁴⁴ Yet these investments have not translated into better customer sentiment, with telecommunications providers showing limited improvement relative to broader net promoter score benchmarks in 2025.⁴⁵ By the early 2020s, connectivity had come to be viewed as table stakes, driving commoditization and intensifying price sensitivity.⁴⁶ Moreover, legacy systems have led to fragmented customer experiences, characterized by long wait times and disjointed support channels.⁴⁷

In 2026, the industry faces what some refer to as a crisis of customer value and brand loyalty.⁴⁸ Despite investments in fiber, 5G expansion, and digital service layers, customers perceive little meaningful differentiation among telecoms.⁴⁹ Consumer sentiment data indicates that up to 77% of consumers feel no loyalty to their provider, and only 47% remain with their primary telecom operator for more than five years, while annual churn rates across telecom providers are around 22%.⁵⁰

A widening discrepancy exists between network improvements and customer-perceived value. Broader customer-experience research shows that 86% of consumers are willing to pay more for a better experience, and 73% consider experience a key driver of loyalty; yet few telecom brands consistently deliver personalization, proactive service, or coherent digital journeys.⁵¹

In industries such as airlines, hospitality, and retail, where core offerings have been commoditized, loyalty programs have become important tools for differentiation, engagement, and ecosystem expansion. Telecoms face a similar challenge: Connectivity alone offers limited differentiation and lower average customer spending, making partnerships and ecosystem-based loyalty models a possible way to extend relevance and perceived value beyond the network.⁵² Many operators are now transitioning from product-centric models to value ecosystems designed to drive engagement, unlock emotional relevance, and differentiate their brands. These ecosystems integrate rewards, digital entertainment, lifestyle benefits, and targeted offers within unified customer platforms. Early pilots demonstrate measurable outcomes: Loyalty programs can increase customer sentiment by up to 15% and reduce churn by approximately 8%.⁵³

Recovering customer satisfaction is also important. Customers expect proactive service, reliability, and fairness, especially during outages or disruptions. Measures such as automatic bill credits during service interruptions, real-time network transparency, and AI-enabled support can help.⁵⁴

Telecom operators should increasingly utilize AI agents to automate routine support, freeing human teams to focus on more complex issues. Many operators are likely to implement unified omnichannel platforms to deliver more consistent and transparent customer experiences. However, it will be interesting to see whether personalization builds trust or heightens privacy concerns in regulatory environments.

Strategic questions to consider

1. Which approaches—strategic partnerships, enhanced loyalty programs, or exclusive products and offers—will most effectively drive customer stickiness and brand affinity.
2. How do companies scale AI agents to automate routine support while elevating human teams to handle complex, high-empathy interactions?
3. What new key performance indicators beyond net promoter score should companies build to define success in the next era of loyalty and trust?

Potential signposts for the future

1. We were too cautious about the number of telecoms that announced they would build AI factories. It now seems to be the new normal. How many more will be announced in 2026?
2. We continue to be cautious about the deployment of AI-enabled radio-access networks, but will keep our eyes open.
3. Net fixed wireless access additions in the United States and select European countries remained strong in 2025, but speeds in the US market were down a little toward the end of the year.⁵⁵ This could be a sign that providers may be reaching capacity limits—something else to watch.
4. As of January 2026, there are now requests from various companies to place an additional 1.2 million satellites to be placed in low Earth orbit over time, roughly 100 times more than the approximately 12,000 in orbit at the end of 2025. A key signpost will be the ability to get permissions for those satellites, build them, and especially launch them.⁵⁶
5. We’re predicting that the US communications infrastructure index keeps climbing through 2030 (figure 2). We’ll see if that climb happens in 2026.