Greater scale among mobile operators can significantly improve financial sustainability, increase network investment and accelerate 5G deployment without increasing consumer prices, according to a new GSMA Intelligence report. The study argues that enabling operators to achieve efficient scale strengthens long-term investment in mobile infrastructure while delivering better network performance for consumers.
The GSMA Intelligence report, prepared by Pau Castells, Head of Economic Analysis, analysed data from 394 mobile operators across 154 countries covering the 2010–2024 period and found a strong relationship between operator scale and profitability. Compared with the largest operator in a market, the second-largest operator records EBITDA margins around 1.9 percentage points lower, the third-largest operator 5.5 percentage points lower, and the fourth-largest operator up to 16 percentage points lower, highlighting the financial challenges faced by smaller operators.
Telecom operators continue to face heavy investment requirements for spectrum acquisition and mobile network expansion while revenue growth remains under pressure. Although digital services beyond connectivity have added around two percentage points to revenue growth for major operators, the improvement has not been sufficient to offset rising infrastructure costs.
Markets representing more than 2.9 billion mobile connections have reduced the number of mobile operators since the end of 2017, while only around 550 million connections are in markets where the number of operators has increased. The trend reflects industry efforts to achieve greater scale and improve network investment efficiency.
The GSMA Intelligence report highlights a widening gap between declining Average Revenue Per User (ARPU) and rapidly increasing mobile data consumption, creating sustained financial pressure on mobile operators. While global ARPU has fallen steadily from around US$16 in 2010 to below US$9 by 2025, mobile data traffic per connection has surged from less than 1 GB to approximately 12 GB over the same period. This means operators are carrying significantly more network traffic while generating less revenue from each customer.
The report says this structural decline in ARPU, combined with persistently high network investment and operating costs, has made operator scale increasingly important. In Europe, markets with three mobile operators have invested around 48 percent more per connection than four-player markets since 2016. The higher investment has resulted in 15 percent faster average network speeds, earlier and broader 5G rollout, and higher 5G adoption, while maintaining broadly similar consumer pricing.
GSMA Intelligence also found similar trends in Latin America. Every 100-point increase in market concentration (HHI) increased operator capital expenditure by 4.5 percent and improved average download speeds by 4 Mbps, while a 500-point increase boosted capex by 20 percent and download speeds by 4.5 Mbps. Importantly, these improvements occurred without any measurable increase in consumer prices, suggesting that greater operator scale can enhance network performance despite continued pressure on ARPU.
Market consolidation in Latin America led to higher network investment without affecting consumer pricing. Every 100-point increase in the Herfindahl-Hirschman Index (HHI) increased operator capital expenditure by 4.5 percent, while a 500-point increase lifted capex by 20 percent. Download speeds improved by 4 Mbps and 4.5 Mbps, respectively, with no measurable increase in consumer prices. Peak investment benefits were observed at an HHI of 4,700, while download speed gains peaked around an HHI of 4,300.
Europe shows similar results. Since 2016, operators in three-player markets have invested around 48 percent more per connection than operators in four-player markets. The higher investment translated into 15 percent faster average mobile network speeds, earlier and broader 5G deployment, and stronger 5G adoption, while maintaining competitive pricing for consumers.
BABURAJAN KIZHAKEDATH
