Analysts at Omdia have revealed what will be the trends that will form the strategies of communication service providers (CSPs) to improve business growth in 2025.
#1
CSPs are expanding beyond traditional connectivity services to tap into the $2.7 trillion B2B transformation market through partnerships and investments in cybersecurity, cloud, IoT, and AI-driven computing. They aim to differentiate through B2B sales, integration, and managed services, with customer-focused initiatives expected by 2025. In the B2C market, growth areas include gaming, financial services, smart home solutions, e-health, e-learning, and utilities. Additionally, some operators are entering the search and advertising market as Google’s dominance faces regulatory and competitive challenges, Dario Talmesio, Research Director, Telecoms, said.
#2
CSPs are facing almost stagnant growth in the $1.3 trillion connectivity market. By 2025, 5G Standalone (SA) and 5G-advanced will reach mass-market adoption, covering 55 percent of subscribers and enabling advanced features like enhanced uplink, low latency, and differentiated service tiers. Network APIs are expected to generate $750 million in revenue, driving innovation as hyperscale operators and developers explore premium connectivity features. These advancements are likely to unlock new use cases, transforming the telecom market in 2025.
#3
In the consumer fixed market, telecom investments are increasingly focused on driving revenue growth. The telco digital home market is expected to grow 13 percent annually, reaching $547 billion by 2029, driven primarily by broadband subscriptions. However, fixed-telephony revenues are declining, and pay TV is stagnating. With broadband nearing saturation in some regions, telcos must adopt innovative monetization strategies, including personalized offerings, enhanced services like Total Consumer Cybersecurity, and in-app advertising. From 2025, revenue growth will become the key benchmark for strategic investments, replacing earlier priorities like efficiency and churn reduction, says Michael Philpott, Research Director, Service Provider Consumer.
#4
Omdia projects stagnant consumer mobile service revenue growth for 2025, prompting Tier 1 operators to explore new 5G monetization strategies. Success will depend on advanced customer segmentation and targeting affluent niches through enhanced network capabilities like network slicing, Quality of Service (QoS), 5G Advanced (5G-A), and AI-driven marketing platforms. For example, operators can offer premium uplink tariffs to social media influencers or tailored network slices for video streamers and event attendees. Emerging markets are already adopting QoS-based tariffs, while developed markets see growing traction for network slices. Strategic segmentation will be critical for driving new revenue streams in 2025, Nicole McCormick, Senior Principal Analyst, Broadband & Bundling, said.
#5
By 2025, network services must prioritize ease of use and adaptability to remain relevant, with Network-as-a-Service (NaaS) emerging as a key solution. NaaS emphasizes customer-centric features, including simplified contracts, streamlined portfolios, and user-friendly billing. It also focuses on design aspects like self-service portals and operational flexibility, such as service swapping, bandwidth scaling, and carrier-to-carrier automation via network APIs. Technologies like network virtualization, public and private 5G, network slicing, and SASE/SSE migrations underpin the NaaS model, ensuring networks meet evolving customer demands and dynamic business needs, Camille Mendler, Chief Analyst, Service Provider Enterprise, said.
#6
By 2025, network providers will explore their role in the enterprise AI value chain. They have opportunities to offer consulting, training, hosting, management, orchestration, and security services tailored to enterprise AI needs. Supporting AI at scale will require intelligent network and cloud infrastructure. Providers will leverage AI tools to design, manage, and support their customers’ AI applications, creating a relationship between their AI capabilities and enterprise demands, Brian Washburn, Research Director, Service Provider Enterprise and Wholesale, said.
#7
AI will become integral to mobile networks, particularly in enhancing Radio Access Networks (RAN). It will optimize various aspects, from air interfaces to baseband processing and management, influencing every stage of the network lifecycle, including planning, operations, and maintenance. The integration of AI with RAN on edge infrastructure offers benefits like improved resource efficiency and potential new revenue streams, such as GPU-as-a-service, though full realization will take time. Additionally, AI will increasingly impact the mobile core, driving automation in network optimization, operations, and security, Remy Pascal, Principal Analyst, Mobile infrastructure, said.
#8
Next year is expected to bring significant innovations and announcements in the network API space. While the landscape may seem complex, initiatives like the global network API combiner JV (50 percent owned by Ericsson) aim to simplify connections between CSPs and developer-facing aggregators such as Infobip and Vonage. If the JV receives regulatory approval, more API combiners are likely to form alliances for economies of scale. The adoption of open APIs is supported by 5G mobile core network technology, which is more API-native, and increasing support from telco executives. Telcos recognize the value of community-based and cross-operator approaches to reach broader markets, James Crawshaw, Practice Leader, Telecoms, said.
#9
AI is driving significant growth in the optical components market, particularly within data centers. The demand for optical transceivers, active optical cables (AOCs), and active electrical cables (AECs) has surged to support the AI revolution. Data rates connecting XPUs have rapidly increased from 100G/200G to 400G and 800G, with 1.6T on the horizon. However, factors like power consumption, power delivery, new cooling infrastructure, and manufacturing capacity will slow the deployment of these technologies. Despite these challenges, the demand for optical components will remain strong through 2025, Lisa Huff, Senior Principal Analyst, Optical Components, said.
#10
AI is driving the development of GigaWatt AI Training Centers and a new era of high-capacity optical networks. CSPs are expanding their fiber infrastructure by building low-latency fiber routes, offering managed optical fiber networks (MOFNs), and enhancing their Wave portfolios with 100G, 400G, and 800G capabilities. Optical vendors are supporting this growth with high-performance terrestrial and submarine transmission systems up to 1.6Tbps. By 2025, 800G low-power pluggable solutions using 3nm CMOS technology will emerge. The AI-driven build cycle is also fueling R&D in amplification techniques and innovations in hollow-core and multicore fibers, aiming to surpass Shannon’s Limit, Daryl Inniss, Analyst, Optical Components and Fiber Ian Redpath, Research Director, Transport Networks and Components, said.
#11
AI is transforming end-to-end IP networking, from the core to the edge, by driving innovation in secure service delivery and enabling faster responses to critical network management challenges. This shift enhances the efficiency and adaptability of networks, allowing for improved service performance and quicker issue resolution. Service providers need vendor community guidance on trending of AI-enabled network automation, O&M modernization, and quantum-safe cryptographic algorithms against multifaceted security vulnerabilities to build a robust IP networking for 95 percent of bursty AI workloads, Sameer Malik, Senior Principal Analyst, Routing and Switching, said.
The rise of AI will accelerate telcos’ adoption of cloud-native principles, which in turn will drive the broader adoption of networked edge computing beyond AI-driven use cases, Kerem Arsal, Senior Principal Analyst, Networked Edge and 5G Transport, said.
Baburajan Kizhakedath
