Telecommunications market
The global telecommunications market continued to be dominated in 2025 by growth in data traffic and by the ongoing expansion of high-performance network infrastructures. Demand for telecommunications services was influenced in particular by the increasing digitalization of the economy and society and the growing need for reliable and secure connectivity.
In mobile communications, global data traffic continued to grow in 2025. According to Ericsson, mobile data traffic was up by around 20 % compared with the prior year. The main drivers behind this were the rising consumption of video content, especially of short videos and streaming offers, as well as the growing use of social media and cloud-based apps. The proportion of data traffic handled via 5G continued to increase.
The volume of data traffic also continued to rise in the fixed network. Globally, fixed-network data traffic grew by around 11 % in 2025 compared with the prior year. The trend continued to be shaped by the ongoing shift from linear television to on-demand and streaming services. The growing proportion of high-resolution content, increasing live streaming of sports and major events, and the greater use of cloud-based apps resulted in a sustained increase in bandwidth requirements. In this context, the ongoing build-out of fiber-optic networks provides the basis for higher transmission speeds and improved network quality. Furthermore, fixed wireless access (FWA) continued to grow in importance in some markets, especially North America.
The global telecommunications market developed moderately overall in 2025. According to Analysys Mason’s market observations, telecommunications services revenues increased slightly in both Europe and the United States, again driven largely by data services. Despite similar growth dynamics, regional differences in market structures and underlying conditions were evident. While the North American telecommunications market is characterized by lower fragmentation and higher average revenue per customer, revenue development in Europe continued to be dominated by intense competition and high price pressure, despite sustained major investments in the optical-fiber and mobile networks.
Competition in the telecommunications industry remained fierce in 2025. Consumers benefit from a wide range of products to choose from. In the fixed network, established telecommunications companies are competing with cable network operators, regional fiber-optic providers, and resellers, who in Europe make use of regulated wholesale products. In most mobile communications markets, there are three or four network operators with their own network infrastructure; many markets are also being served by numerous mobile virtual network operators (MVNOs).
In parallel to economic development, telecommunications networks also continue to play an increasingly important role in security and resilience. A study published in 2025 by Copenhagen Economics underlines that secure and resilient telecommunications networks are a core prerequisite for the functioning of modern economies. They form the basis for digital services in critical sectors such as energy, healthcare, transportation, and financial services. Despite the growing number of security incidents, the analysis shows that the resilience of networks has improved as downtime for end users has been reduced significantly. At the same time, demands on operators due to cyber threats and climate-related risks continue to grow.
Against this backdrop, discussions continue on the regulatory structure of the telecommunications markets in the European Union. Various reports published at the European level concern themselves with potential approaches to reforming the framework for the telecommunications sector. In January 2026, the European Commission presented a legislative proposal for reforming the regulatory framework (Digital Networks Act).
Germany
According to the ifo Institute, digitalization is one of the most important stabilizers of a German economy that continues to stagnate. The German IT and telecommunications market continued its upward trend in 2025, mainly on the back of progress in the build-out of the mobile and fiber-optic networks, and the continuing rise in data volumes. The industry association Bitkom puts revenue growth in 2025 at 3.9 %.
The market for fixed-network broadband continued to be dominated in 2025 by high infrastructure investments in modern fiber-optic networks. Besides established telecommunications companies, public utilities, municipalities, and special purpose associations, as well as investor-driven network providers, are also active in this segment. According to VATM’s 2025 market analysis, the number of households and companies covered by optical fiber (homes passed) increased to 24.8 million, while the number of fiber-optic lines actually connected (homes connected) rose to 9.9 million. Demand for higher bandwidths is bolstered by increasing video, cloud, and streaming apps as well as growing use of hybrid working and collaboration models.
The IPTV market also continued to enjoy growth: With gigabit availability rising steadily and a wide range of UHD/HD content, the number of IP-based TV lines climbed further. IPTV service providers also continued to benefit from the abolition of the Nebenkostenprivileg (a specificity of German law relating to housing associations, whereby cable access fees could be included in monthly rental invoices).
Revenues in the mobile market rose in 2025. Nevertheless, ongoing price pressure in the market put revenues per user under pressure, while at the same time mobile data usage continued to grow strongly. The number of connected devices also increased substantially both in the consumer segment and in the IoT/M2M segment, further increasing demand for mobile data volumes and high transmission rates. The marketing of integrated fixed-network/mobile offers continued, bolstering customer retention.
Digitalization remains a key growth driver in industry and for SMEs. Companies are increasingly investing in connectivity, cloud infrastructure, and automation solutions for industrial applications. This trend benefits in particular data services, cloud services, IoT/M2M solutions, and security applications.
United States
In 2025, the U.S. telecommunications market experienced advancements across multiple domains: 5G Standalone rollout, fiber build-out, fixed wireless expansion, and direct-to-cell service integrating satellites into terrestrial mobile wireless communications. Collectively, these developments enhanced connectivity, supported emerging technologies, and laid the groundwork for next-generation networks.
The wireless and broadband markets continued to experience competitive pressures. Promotional measures by service providers led to higher cost of customer acquisition and retention.
Major carriers including T‑Mobile US expanded their mobile wireless networks. T‑Mobile US led with a full standalone and 5G advanced network, offering capabilities like network slicing, low latency, and better performance. AT&T has started to move select services on its 5G Standalone network and is expanding availability to more customers as device support and provisioning allow.
Fiber-to-the-home (FTTH) deployments reached record levels, with over 88 million U.S. homes passed (56.5 % of households) by the end of the first half of 2025. Growth was driven by private investments and public funding programs like Broadband Equity, Access, and Deployment (BEAD), positioning fiber as a pillar of high-speed broadband.
Fixed Wireless Access (FWA) in-home broadband saw continued growth in 2025. The three largest service providers, T‑Mobile US, AT&T and Verizon, had all-time-high quarterly FWA net additions over 1 million connections in the third quarter of 2025 and their combined FWA user base stood at 14.6 million connections. With their FWA in-home broadband offerings, service providers are capitalizing on consumer preferences for fast, reliable services.
In 2025, T‑Mobile US rolled out a new direct-to-cell satellite phone service (T-Satellite) through a cooperation with SpaceX. The service provides customers with messaging and other services in outdoor areas where terrestrial networks are not available. Other mobile wireless providers are in the early stages of providing similar services.
The U.S. Federal Communications Commission (FCC) in 2025 began preparing to make additional mid-band spectrum available for 5G and 6G services via auctions in 2026 and 2027.
Europe
The European market for telecommunications and digital services benefited in the reporting year from a generally stable economic environment. According to the European Central Bank (ECB), key growth drivers were services (including digital services), IT modernization, and the growing use of AI. A robust labor market, falling interest rates, and largely stable inflation levels buoyed demand.
Demand for broadband lines continued unabated throughout the reporting year. According to Analysys Mason, this development was also reflected in the figures for the fixed-network business (excluding systems solutions) for the first nine months of 2025: Revenues from broadband business in particular grew by almost 9 %. The TV business also reported an increase of around 4 %. This offset the decline in revenues from voice telephony. Mobile revenues increased, too, by around 3 % according to Analysys Mason, driven by much higher data usage and the rising popularity of data-intensive apps. In addition, the build-out of 5G networks drove demand for higher-value rate plans and increased investments in telecommunications infrastructure.
The European markets are increasingly characterized by consolidation, the rise of large, converged providers, and new market players. Network operators primarily rely on investments in optical fiber and 5G to improve capacity and quality, retain customers through integrated service packages, and to secure their product portfolio as a competitive factor in a maturing telecommunications market.
Hungary saw the greatest consolidation activity, driven by takeovers of Canal+ (satellite TV), PR Telecom (regional fixed network), and Netfone Telecom (MVNO) by 4iG to strengthen its fixed-network and mobile presence. 4iG also continued its expansion in the Western Balkans – following steps in Albania and Montenegro – by joining forces with ONE Macedonia Telecommunications in North Macedonia, thereby reinforcing its multi-country growth strategy. An important structural change was the establishment of 2Connect, which was created by combining the network assets of Invitech, Antenna Hungária, DIGI, and One Magyarország into one large wholesale infrastructure provider, increasing efficiency, scalability, and market power. In Greece, Greek company Public Power Corporation (PPC) officially entered the local telecommunications market in mid-2025, launching its own FTTH internet service for consumers. This large, nationwide fiber-optic network is now being used to offer aggressive prices and compete directly with existing providers such as OTE (Cosmote), NOVA, and Vodafone. This marks an important change in Greece’s digital infrastructure with growing competition.
Convergence (FMC) remains a strategic focus in the European markets. According to Analysys Mason, revenues for FMC products grew by around 12 % in the first nine months of 2025 compared with the same period of the prior year. FMC remains a reliable lever for our national companies and makes a substantial contribution to service revenues. MagentaOne customers show higher satisfaction and lower willingness to switch providers, strengthening the success of the business. FMC is evolving from traditional bundled products to a digital lifestyle ecosystem, especially in convergent, mature markets. Our national company in Greece, for example, bundles services such as payments, energy, insurance, and food deliveries into an integrated, simple solution to meet everyday needs. In our national company in Hungary, digital health services are being added to the portfolio and MagentaOne customers receive more attractive price options. Additional added value arises from target group-specific and optional personalization of services.
In addition to aggregating major local and international linear TV providers, our TV business also includes integrating the corresponding, often downstream on-demand offerings from these partners (e.g., Voyo in Slovakia and Croatia, RTL+, and AMC Selekt in Hungary). We are pursuing this approach more and more consistently in the Europe operating segment, so as to offer our customers not just all content genres (e.g., sports, entertainment, news, etc.), but also the freedom to decide when to consume them (i.e., on-demand). According to Analysys Mason, streaming services recorded strong growth in the first nine months of 2025, recovering with revenue growth of around 15 %.
In the business customer segment, the reporting year was dominated by the further development of AI-based solutions, which are playing a key role in ensuring future-proof development. Accordingly, demand for AI-based solutions is surging. This requires a rapid transformation of business processes. Telecommunications providers will have a key role to play in building the necessary infrastructure, especially when it comes to factors such as network speed and stability, cybersecurity, and cloud computing.
Systems Solutions
The IT business in our core market of Germany and in Austria and Switzerland (DACH), which we address in the Systems Solutions segment under the T‑Systems brand, performed well in the reporting year. Market volume increased by 3.1 % to EUR 49 billion. Companies in the DACH economic area continued to invest in the digital transformation, in particular in cloud and digital services. Demand for these services remained a key growth driver in the reporting year.
The cloud market addressed by T‑Systems and the market for digital services in the DACH region recorded growth of 3.3 % and 2.9 %, respectively, in 2025. Our strategic focus industries also performed well for the most part: The healthcare market volume rose by 5.1 %, while the public sector recorded similarly strong growth of 5.9 %. By contrast, the automotive industry remained subdued in light of economic and structural changes, with the market for related IT services declining by 2.0 % as a result.
The competition and price environment for the systems solutions business remained challenging in the reporting year. Besides established IT service providers like IBM, Atos and Capgemini, global hyperscalers Amazon Web Services, Microsoft Azure, and Google Cloud in particular added to the platform and innovation pressure in the market. Furthermore, providers with largely offshore-based service models, including Tata Consultancy Services, Infosys, Wipro, and Accenture, contributed to sustained strong price competition. These market conditions put pressure on margins across the industry and underline the relevance of efficient, scalable, and differentiated product and service portfolios.