AI, D2D, M&A: Top telecom trends for 2026

• There’s no shortage of telecom sector predictions for 2026
• AI remains a key trend, but reality is creeping in
• Europe could also see more M&A, while direct-to-device (D2D) services are set to proliferate

It’s that time of year when industry observers (rashly?) attempt to predict what might lie ahead for the telecom sector – a task made no easier by the rapidly shifting geopolitical landscape and general global mayhem.

Analyst firms have certainly been indulging in some crystal-ball gazing in recent weeks. It probably comes as a surprise to no one that artificial intelligence (AI) features heavily in prediction round-ups.

Indeed, Deloitte remarks that more than half of its 13 tech, media and telecoms (TMT) topics for 2026 “follow an AI theme”. Analysys Mason could draw a similar conclusion given that five of its nine themes have AI in the title, with another also focusing on GPU-as-a-service.

Following the AI hype of recent years, it also seems that reality is setting in, with growing emphasis on the practical applications of AI technology.

For instance, Deloitte predicts that “the roar around artificial intelligence will be getting quieter” in 2026 as the “sometimes unglamorous, high-impact work of making AI usable at scale continues to get underway. The gap between promise and reality will narrow but not disappear: Progress will come less from headline-grabbing new models and more from fundamentals,” the firm says. 

Analysys Mason partner Oli Barnett thinks that 2026 “will be the year businesses finally see AI for what it is: Not a universal answer, but a technology that is transformative in the right places and value-destroying in the wrong ones”.

His colleague Adaora Okeleke also sees telcos moving from generative AI (GenAI)-based agents to agentic AI, but warns that progress could stall if investments do not yield expected outcomes. 

Other cautionary words come from Caroline Gabriel, who says telcos will battle for position as their infrastructure capex is dwarfed by spending on AI. She advises telcos to rethink investments and partnerships to retain a key role in the digital infrastructure value chain. 

Omdia, meanwhile, declares that the telecoms industry “is poised for a transformative year in 2026, marking a pivotal shift from the era of digital transformation to the dawn of AI transformation”. At the same time, the analyst firm acknowledges that the path forward “will not be without challenges”, citing in particular the geopolitical dynamics. 

Elsewhere, satellite direct-to-device (D2D) services have certainly become a hot topic in recent months, as illustrated by TelecomTV’s extensive coverage of non-terrestrial networks (NTNs).  

Analysys Mason’s satellite specialist, Lluc Palerm, says these services “will scale up very rapidly and be in everyone’s hands in the coming months. Telecoms operators need to move fast to avoid missing the opportunity”. 

If telcos need any further encouragement, Palerm says that implementing D2D services in 2026 “could give MNOs an annual revenue uplift of around 1%”. He further notes that while D2D services bring strong service differentiation, “our survey results also provide evidence that they may help win customers from rivals, increase customer retention and unlock upsell opportunities”.

Of course, no telecom industry predictions would be complete without some mention of M&A. Charles Murray from Analysys Mason obliges here with the prophecy that France is likely to be the next major European market to go from four to three mobile operators in 2026. 

Indeed, Bouygues Telecom, Iliad and Orange have already made a joint, non-binding offer for Altice-owned SFR. Although the offer was rejected, “the deal is not dead in the water”, Murray says. 

CCS Insight also provides some M&A predictions in its comprehensive outlook for 2026 and beyond, including that two European operators will agree a strategic partnership for their enterprise units by 2027. BT is namechecked as one of the potential contenders here.

In addition, a Middle Eastern telco is expected to take a majority stake in a western European operator by the end of 2028. Worth noting here is that e& has built up shares in Vodafone and acquired telecom assets in eastern Europe, and Saudi Arabia’s STC has a nearly 10% stake in Telefónica.

“As European operators struggle for growth, some could fall prey, such as France’s SFR or Vodafone Portugal, although any move would prove controversial amid concerns about national security,” CCS Insight states.

- Anne Morris, Contributing Editor, TelecomTV