The State of the Telecommunications Industry

Jeff Ansted portrait

The telecommunications industry represents one of the most critical markets not only in the United States, but around the world, with telecommunications technology frequently driving commercial innovation, globalization, and economic prosperity. The value of telecommunications has become all the more important over the course of the COVID-19 pandemic, with both corporations and families turning to wireless forms of communication to remain in touch.

Considering its importance, it is no surprise that the global information technology (IT) sector spends $1.33 trillion on telecommunication services every year. Worldwide mobile data traffic, meanwhile, exceeds 51 exabytes (one exabyte is equal to one billion gigabytes).

In 2020, the global telecommunications market stood at $2.55 trillion. The market grew by a compound annual growth rate (CAGR) of 6.2 percent to $2.71 trillion in 2021, with an expected CAGR of 6 percent through 2025, when the market should approach $3.5 trillion.

America’s telecommunications market grew to $310 billion in 2021, a 3.9 percent increase over 2020. The annualized market size for US carriers on the global stage, meanwhile, increased by nearly 2 percent. As a whole, the telecommunications carrier industry has outpaced overall economic growth in the United States. As industry growth continues, corporations and businesses remain the most valuable clients for telecommunications operators.

In the US, AT&T provides more mobile services than any other telecommunications services provider, with a market share of 44.8 percent of all wireless subscriptions. Other major wireless operators include Verizon and T-Mobile. T-Mobile’s 2020 acquisition of Sprint’s 33.84 million users, a $26.5 billion transaction, saw the carrier’s postpaid wireless subscriber base exceed 80 million.

AT&T is also the global telecommunications leader by most metrics, with $161.5 billion in annual revenue. That said, the company’s $525.76 billion in assets is dwarfed by China Telecom Corporation’s $984.38 billion. Asia Pacific represents the largest region for the global telecommunications market, consisting of 34 percent of the global market. North America ranks second, with 32 percent.

As telecommunications companies continue to move forward through the COVID-19 pandemic, executives will need to develop a more nuanced understanding of customer needs. Partnering and re-imagining entertainment experiences, including the use of entertainment bundles, will be key to remaining competitive.

Indeed, Internet TV (more commonly known as content streaming) is a critical area of focus for telecommunications companies. This became readily apparent when AT&T leveraged its acquisition of Time Warner in 2018 to launch WatchTV, a live TV streaming tool that was priced at a more affordable rate than AT&T’s DIRECTV Now service. Over the next few years, major service providers will continue to focus on generating new content and refining the distribution channels and technology platforms for this content.

Looking ahead to 2022 and beyond, important telecommunications market trends include a focus on 5G business clients, the development of new revenue streams in areas such as home security and family management, and an emphasis on customer retention, particularly for the major telecommunications companies. In the US, telecommunications companies will continue to work toward providing rural and other underserved parts of the country with reliable broadband networks.

Jeff Ansted, an experienced leader, has been working in the field of telecommunications and broadband for more than two decades.