“We can go back to the future or… er… forward to the back.” George W Bush
TM Forum’s December 2025 Benchmark Report on telco revenue growth is a substantial piece of work: 35 of the world’s largest operators analysed, $1.1 trillion in combined revenues tracked, and a survey of 129 executives across 86 CSPs. It shows 2.5% service revenue growth in 2024-5 overall, which is marginally ahead of inflation.
For those following TelcoForge’s output through the past year, much of this will land as confirmation of executives’ thoughts rather than revelation. But there are places where the data complicates the narrative, and a few where it flatly contradicts it.
The TM Forum Picture
The headline story is one of tepid recovery. B2C revenues grew 2.3% in 2024-5, up on the previous year. B2B fared better at 5.4% growth. Sounds reasonably positive on one level, but there are large problems here.
- B2C revenues are driven largely by inflation-linked price increases in Western Europe and continued fibre and 5G FWA uptake.
- Meanwhile, the B2B headline figure masks a worrying diversity in actual results. A few groups did well from B2B, but nine of the 20 operator groups reporting B2B results grew at levels below inflation.
Beyond the top line, three themes dominate.
First, diversification is running out of steam. TV and video revenues – the biggest non-core revenues – are actually in decline. Mobile financial services showed impressive growth but remain largely an African success story.
Second, security and sovereign AI represent the clearest new revenue opportunities in B2B globally, with China Telecom and Orange each generating over $1 billion annually from cybersecurity alone. Several telecoms providers grew fast in cloud services and/or datacentres; notably, these were almost all APAC-based.
Third, the theme the report builds its title from: Operators are going “back to the future,” refocusing on core network and IT assets rather than chasing adjacent markets. Telstra’s Connect Future 30 strategy, which explicitly commits to “doubling down on connectivity and radically innovating in the core,” is a notable example. That said, it’s also worth pointing out that Telstra’s revenue growth was below inflation in both B2B and B2C, so in that light some cynics might translate Telstra’s aspiration as “Cut what costs we can to fit our smaller pockets”.
The survey data from different executives reinforces the overall picture from the financials. Mobile and fixed broadband topped the list of B2C revenue opportunities that executives see while security-as-a-service and broadband services lead in B2B.
Network automation, AI-driven customer touchpoints and BSS transformation rank as the most important technology investments. AI talent recruitment was rated the single most critical AI capability, at 67%. It’s a shame that a survey is a relatively blunt tool. Depending on how they are implemented, any of those elements could represent growth aspirations, a ruthless dedication to cost-cutting, or both.
What TelcoForge Would Expect
Several of TM Forum’s findings align closely with positions executives in TelcoForge’s Leaders Reports have been articulating since mid-2025.
The retreat from diversification is entirely consistent with the structural analysis in our September report, “Forging A New Identity For Telcos.” Executives in that discussion were blunt about the industry’s struggles to compete outside its core domain. One noted that “operators as a whole still haven’t figured out what their longer-term strategy is and why they add value to the world.” TM Forum’s data shows that non-core services account for just 11.7% of total revenues, and that few categories are growing fast; security, financial services in specific regions, and potentially now sovereign infrastructure and AI.
The emphasis on AI as primarily a cost-reduction tool was foreseeable too. TM Forum notes that AI “does not yet represent a revenue growth story for CSPs” and that its use has focused on internal efficiency. Our July report, “Structural Bottlenecks to Telco Innovation” documented exactly this dynamic: vendor incentive structures reward cost-saving innovations over breakthrough revenue plays, and internal reward mechanisms actively discourage risk. One executive in that discussion observed that “telcos’ organisation structures and reward structures do not necessarily pay you or reward you for making the next big breakthrough.”
However, managed security services are a great bright spot. The digital world is worrying; TelcoForge’s website coverage has reported on the rising cost of digital fraud (scams now cost the US $1 billion weekly). TM Forum’s revenue data, showing operators like China Mobile, TIM, e& and Vodafone all growing their security businesses over 20% reflects the opportunity which these concerns bear with them. Telcos tend to be highly regulated and associated with questions of upholding national security, which doesn’t serve them well in many areas. However, these are strengths when it comes to creating trust for enterprise customers. It also makes them the go-to companies for supporting national digital sovereignty, whether in secure communications, in datacentres, or in the data and AI running in them.
What TelcoForge Would Not Expect
Two findings sit uncomfortably with positions expressed in TelcoForge’s 2025 output.
The first is the relative optimism around B2C pricing power. TM Forum reports that operators, particularly in Western Europe, have “successfully introduced inflation-linked price increases” and that brand loyalty continues to support significant price premiums over MVNOs. Ten of 17 tracked B2C operators grew revenues above their home-country inflation rate.
This sits in tension with the view of some leaders TelcoForge spoke to that core connectivity is commoditising and that, as one executive put it in September, “if you just charge for the fundamental pipe, are you ever going to be profitable?” The data suggests that, at least for now, the answer is a qualified yes, although how long inflation-linked increases remain sustainable in the face of MVNO competition and consumer fatigue is still to be seen. Market consolidation could buoy consumer pricing, and we have certainly seen some of that over the past 18 months. However, there is a limit to how far this can go without regulators just giving up and going home.
Meanwhile, TM Forum estimates the global API monetisation market at just $1 billion, placing it alongside AI infrastructure as the smallest category in the entire B2B revenue taxonomy. Only 28% of survey respondents rated it a “significant” opportunity, the joint lowest of any B2B category listed. This is a sobering data point for those who have argued enthusiastically in favour of APIs.
I would note that this simple revenue data point may be pessimistic, for several reasons. First, the monetisation is not about the technology but about the model used. Those who control the platform control the monetisation, as Apple did with the App Store and streaming platforms like Netflix do with content. By contrast, network APIs are obtainable from a wide range of providers; telcos’ own developer portals, aggregators like Nokia, Enea and Infobip, and hyperscalers’ development platforms. So the market power of the telcos is limited under the current model.
Secondly, and more importantly, the point isn’t so much the API itself. Make the APIs available as cheaply and easily as possible, and this encourages trial and adoption by enterprises of all kinds in their own projects. That fulfils two functions; it gives enterprises a clearer idea of the benefits they can receive by working with telecoms providers, while it gives telcos visibility into the kinds of services and capabilities enterprises of different kinds actually want to use. In an age when ‘build it and they will come’ is over, this sets up a new kind of relationship and opens the door to service co-creation.
That, to go back to a point made earlier, would give telcos a proper opportunity to do things differently and compete outside their core domain in a way they just haven’t to date. However, to do this would require a change in mindset and operational set-up, so it is understandable that it would take second place in the near future to services such as security.
Desiderata
It’s worth bearing a few other key points in mind.
First, the report covers revenues rather than margins, and flags explicitly that operators may be “buying” B2B revenue growth through acquisitions and expensive talent. Revenue growth may be masking profitability struggles… although in the age of OpenAI’s ‘success’ perhaps that doesn’t matter?
Second, the structural separation debate deserves more attention than it currently receives in industry benchmarking. TM Forum’s finding that operators are retreating to core network assets is framed as a strategic choice; TelcoForge’s executive discussions suggest it may be an inevitability driven by regulatory constraints, workforce demographics and the sheer complexity of ‘serving two masters’, the government and the shareholders. The energy-sector model of separating generation, distribution and retail, which was discussed at length in our September report, could help telcos square this circle more effectively than they currently can do.
Third, the gap between AI enthusiasm and AI revenue needs closing with specific business cases. While there are significant steps forward being made in network automation, they are great ways to save money rather than grow it. Operationalising AI-based services will require a good deal more than technology, with details such as service assurance and visibility for enterprise customers being top of mind. SK Telecom’s AI CIC, with its stated target of $3.55 billion in annual AI revenue by 2030, is the clearest example of an operator putting a number against the aspiration. Others should follow suit.
Overall, the picture is one of an industry with some very clear strains and great diversification in emphases; some in cloud services, some in security, some in financial services, and others still in cost cutting. While the noise in the industry focuses on whatever’s next, the fundamental forces are the same we’ve seen for years.
