Price declines aren’t a marker of progress and threaten the telecoms industry, writes Dario Betti, CEO, Mobile Ecosystem Forum (MEF)
In an incredibly short period of time, telecommunications services have evolved from a luxury to a necessity; telecom services have become a vital utility that sustains economies, communities, and individuals alike. Connectivity is so deeply woven into daily life that it underpins almost every aspect of modern work and commerce.
For many businesses, the ability to interact with partners, customers, and markets across continents is not optional; it is the foundation of competitiveness. A significant disruption to Internet or mobile services could halt supply chains, cripple financial markets, and cause losses measured in billions – an impact comparable to a prolonged power outage or water shortage.
Just as societies once determined that power grids and water systems must be universal and resilient, the same logic now applies to digital infrastructure. Connectivity is the conduit through which knowledge flows, economies function, and communities thrive. Without it, the machinery of modern life grinds to a halt.
This would suggest that falling telecom prices in many parts of the globe is terrific news. But it’s actually a silver cloud with a very dark lining.
Not really a win
Lower monthly bills for mobile and Internet services promise more affordable access to communication, entertainment, and digital opportunity. In many countries, regulators even celebrate declining prices as evidence of healthy competition. However, the downward trend poses real risks to the telecoms companies providing these services.
Telecommunications is a capital-intensive industry. Building, maintaining, and upgrading networks requires vast investment in spectrum, infrastructure, and technology. Fibre rollout, 5G deployment, and rural connectivity projects all demand billions in spending long before companies see a return. If revenues continue to shrink under pressure from falling prices, operators inevitably will struggle to justify such heavy investment. The future may see networks age, upgrades slow, and innovation stall. Short term, consumers may enjoy cheaper rates, but long term, the cost could be slower speeds, patchy coverage, and reduced service quality.
Falling prices also threaten the viability of smaller or emerging operators, particularly in competitive markets where margins are already razor thin. Some providers may be forced to exit the market or consolidate with rivals, leaving consumers with fewer choices and potentially higher prices in the long run. What appears as robust competition today can quickly tip into fragility, undermining the stability of the sector and concentrating power in the hands of fewer players. That concentration not only risks price increases but also weakens incentives to innovate.
For consumers, the implications go beyond convenience. Reliable connectivity has become essential for participating in work, education, healthcare, and civic life. If operators cannot generate sustainable revenues, they may cut back on extending networks to underserved areas, widening the digital divide. Those in rural or low-income communities—already most vulnerable to exclusion—would be disproportionately affected, turning what looks like affordability progress into a setback for digital inclusion.
Moreover, as revenues tighten, operators may seek to recoup losses through less transparent means, such as higher fees for premium services, more restrictive data policies, or the monetisation of consumer data. The long-term outcome is not the cheaper, fairer telecoms market that consumers might expect, but one where affordability comes at the cost of quality, privacy, and access.
Inequality among the utilities
In many respects, telecommunications today stands where electricity and water utilities once did: essential for life, yet reliant on sustainable pricing to ensure reliability and reach.
But while the telecoms sector is seeing consumer prices drop, utilities—especially energy and water—are generally seeing upward trajectories, reflecting different market structures and cost drivers. Taking Italy as an example, over the last four years, Italians have seen gas prices soar by 76%, power prices jump by 64.5%, and water and waste services increase by 19% and 7.3%, respectively. Meanwhile, in the same period, the price index for communications services fell by almost 11%.
For the energy and water sectors, there is limited competition, primarily because of the fixed infrastructure. It’s a different story for telecom providers – they often face competitive, deregulated markets with relatively lower infrastructure renewal costs. This is a dynamic presenting benefits to telecom consumers (albeit in the short term) while increasing pressure on operators’ ability to invest and innovate.
The numbers are worrying
In 2023, global telecom service revenues stood at $1.14 trillion. Current forecasts predict this will grow to an underwhelming $1.3 trillion by 2028. At under 3% compound growth (which is below the expected inflation rate), in real terms, the sector is shrinking. In other words, the financial foundation beneath networks is growing weaker.
This is not sustainable forever. When capital intensity is set to fall from 16% to 14% of revenues by 2027, it suggests that operators are already preparing to spend less, not more, just as demand for faster, denser, and more secure networks rises.
Summary
Price declines might feel like progress, but when they undermine the very system that provides the service, consumers are ultimately left worse off. For telecoms to deliver on their promise of universal, reliable connectivity, pricing must reflect not just the cost to households today, but the long-term investment required to keep societies connected tomorrow.
Dario Betti is CEO of MEF (Mobile Ecosystem Forum) a global trade body established in 2000 and headquartered in the UK with members across the world.
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