Telecom services revenue will fall 4.2% per user as new tech fails to deliver enough value by 2027

Total worldwide telecoms revenues from mobile and fixed broadband services will grow 14% between 2022 and 2027 to reach €1.2 trillion ($1.18 trillion). However monthly average revenue per user (ARPU) combined across both mobile and fixed broadband will fall by 4.2% from €7.48 ($7.36) in 2022 to €7.16 ($7.05) in 2027. In mobile markets, it is now evident that 5G will not be sufficient to offset ARPU decline as customers are unwilling to pay more for it. Unlimited data and video streaming services bundled exclusively on 5G contracts have had some success, but this only gives the industry the illusion of a 5G ARPU uplift. In fixed broadband markets, the transition to fiber has had a net positive impact in most cases as the technology offers a much-needed step-change in-home broadband quality of service on the back of the pandemic. However, markets with high fiber penetration are seeing a significant drop in ARPU such as France, Spain, and China as competition intensifies and there isn’t a clear monetization path for fiber customers once they transitioned. Omdia forecasts 5G will account for 5.9 billion subscriptions in 2027 equivalent to a population penetration of 70.9%. Consumer residential fixed broadband subscriptions delivered via fiber to the home will exceed 1 billion subscriptions by 2027 equivalent to a household penetration of 41.9%.