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The telecom industry is navigating a complex web of competitive, regulatory, and technological pressures. From fragmented markets to rising operational costs, it’s a defining moment for operators worldwide. Drawing from a conversation with industry experts Gary Bhomer (Tel-Consult), Paul Wade (Mobilise), and Hamish White (Mobilise), here’s a breakdown of the forces shaping the industry today and where it’s headed.
Market Consolidation: A Necessary Evolution
Telecom markets around the world are moving from four to three-player structures as profitability pressures mount. Large mergers like Vodafone and Three in the UK have ignited debate around consolidation versus competition.
The European market is so fragmented – small countries with three or four operators each. Economically, that just doesn’t work.
Paul Wade, Mobilise
Operators are investing billions in network infrastructure and spectrum, yet revenues remain sluggish. Consolidation is increasingly seen as a strategy to unlock cost efficiencies, improve returns on investment, and create room for innovation.
The Broken Economics of 5G
Once heralded as a transformational technology, 5G is struggling to deliver the expected ROI. Operators are grappling with sky-high CapEx and spectrum costs, without corresponding revenue uplift from consumers.
The CapEx involved with 5G was horrendous… and the public hasn’t really seen any difference between 4G and 5G.
Paul Wade, Mobilise
With minimal perceived difference between 4G and 5G for many users, monetisation remains elusive, forcing a reckoning with the network investment model.
Regulation, Geopolitics, and Infrastructure Constraints
Regulatory and geopolitical dynamics are also reshaping the telecom landscape. Political influence on vendor selection and spectrum allocation is driving fragmentation and uncertainty.
Governments want cheaper prices, but they’re also charging unrealistic money for spectrum. They’re the architects of their own problem.
Paul Wade, Mobilise
In markets like Australia, government co-funding for mobile black spots has reinforced existing monopolies, making it harder for smaller operators to compete or expand.
The Pricing Shift: Moving Up from Rock Bottom
“It’s probably the only industry I know where prices continue to decline over time; I think we’ve now hit that bottom.” – Gary Bhomer
It’s probably the only industry I know where prices continue to decline over time; I think we’ve now hit that bottom.
Gary Bhomer, Tel-Consult
After years of race-to-the-bottom pricing, markets like Australia are seeing a shift. Operators are beginning to raise prices across post-paid and wholesale as maintaining ultra-low tariffs becomes unsustainable.
This new era of pricing realism could help rebalance the value chain and restore financial health to the industry, especially in the face of ever-growing infrastructure costs.
Starlink, LEO Satellites, and Rural Disruption
Satellite connectivity providers like Starlink are emerging as serious players, particularly in underserved rural and remote regions. But their long-term impact is still being debated.
While satellite is unlikely to replace fibre or terrestrial networks in dense urban areas, it’s becoming an essential complement in connectivity strategies, especially where traditional rollouts are uneconomical.
There are a lot of remote communities that really don’t have a provider, or maybe just one. Starlink is already proving transformative for those regions.
Gary Bhomer, Tel-Consult
Open RAN: Promise, Complexity, and Stall-Out
Open RAN was once billed as the answer to vendor lock-in and network costs, but the reality hasn’t matched the hype. Complexity and integration challenges have slowed momentum.
“There was a lot of promise, a lot of hype, and not a lot of movement.”
Operators remain cautious, and big vendors are defending their turf. As Paul put it: “The incumbent vendors have done an amazing job in protecting their patch.”
AI and Customer Experience: The Next Battleground
With network and device differentiation fading, operators must compete on customer experience. AI in telecom offers new tools to streamline operations, reduce churn, and improve engagement. However, the focus must shift to user value, not just internal efficiencies.
“I think AI has a big role to play,” said Gary. “Not just for cost savings, but to make the onboarding process and customer service smoother.”
AI also has potential in areas like personalised marketing, fraud prevention, and decision intelligence – if operators can prioritise it amidst tight budgets and organisational inertia.
Telco Innovation: Held Back by Culture?
A lack of innovation culture may hold traditional telcos back despite emerging tools and technologies. Comparisons with fintech and neobanks highlight the challenge.
There are a lot of remote communities that really don’t have a provider, or maybe just one. Starlink is already proving transformative for those regions.
Hamish White, Mobilise
To stay relevant, telcos must adopt a startup mindset – testing, learning, and embracing digital-first models to unlock new revenue streams and customer loyalty.
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Disintermediation Risks: When the Device Becomes the Network
One looming threat is the potential for device manufacturers or platforms to bypass operators altogether. With eSIM and Embedded Connectivity, Apple, Google, and even Uber could sell connectivity directly.
“If you control the device, why shouldn’t you control the connectivity?” asked Paul. “It’s the next logical step.”
This model raises questions about the long-term role of telcos, especially if infrastructure ownership separates further from customer relationships.
Conclusion: Reinvent or Be Replaced
The telecom industry is at a critical moment. Revenue pressures, network investment challenges, and new competitive dynamics are pushing operators to adapt or be left behind.
Whether through consolidation, smarter regulation, AI, or new service models, the industry must evolve to meet changing expectations and seize new opportunities before others do.
