• Moody’s has provided revenue and earnings forecasts for the global telecom operator sector in 2026
• The company’s corporate finance group predicts revenues and earnings stability, although macroeconomic factors remain challenging
• All key regions are grappling with similar trends, from M&A to tech innovation and more

The corporate finance group of major credit rating agency Moody’s reckons the global telecom operator sector is set for stable revenue and core earnings growth in 2026, although expectations for the different geographic regions vary quite markedly, with Latin America set for the strongest growth. 

During the ratings agency’s recent Global Telecommunications Market Update 2026, Carlos Winzer, associate managing director of the corporate finance group, said average organic revenue growth for the global telco sector is projected at 2.3% and organic earnings before interest, taxes, depreciation and amortisation (EBITDA) growth at 2.9% for the largest operators globally.

“This stability is supported by price increases, which continue to gain traction, the phasing out of the legacy copper networks, which are being substituted with fibre, and the integration of GenAI [generative AI] to drive efficiency. Industry consolidation is expected to further strengthen the sector’s foundations,” Winzer said.

In terms of the different regions, North America is expected to see the lowest revenue growth of 1.3%, while Latin America (LatAm) will see the highest at 3.7%. LatAm also leads with the highest expected EBITDA growth of 5.2%, while Asia Pacific (APAC) brings up the rear with 2.2% (see map, above). 

Although macroeconomic conditions are challenging and risks remain, Winzer said telecom service providers “continue to evolve their business models in a period of transformation marked by rising data consumption and expanding broadband access”.

M&A on the cards in Europe

Telcos in Europe, the Middle East and Africa (EMEA) are expected to see revenue and EBITDA growth of 3.6% and 4% respectively owing to growing data demand, higher broadband penetration and streamlining at an operational level, said Winzer.

At the same time, he noted that major European telcos “are positioned for a wave of mergers and acquisitions in 2026, with consolidation talks intensifying across several markets”, such as in France, Italy and Spain. 

“All these developments suggest that 2026 could be a pivotal year for European telecom M&A as operators seek scale and efficiency in an increasingly competitive market,” said Winzer.

Telcos in Europe also continue to hold significant amounts of debt, and will “need to navigate a challenging funding environment, balancing investment demands with prudent financial management to ensure continued access to liquidity and support for future growth”, he added.

Turning to North America, Emile El-Nems, VP and senior credit officer at Moody’s, said the outlook for the US is stable because of underlying dynamics, such as a more supportive regulatory environment, limited pricing power, “operating leverage” owing to acquisitions, and modest subscriber growth.

“We are expecting seven to eight million subscribers [net adds] in wireless… and about two and a half million new broadband subscribers in the market. For 2026, what we are projecting is modest wireless revenue growth of around 2.5%, broadband revenue to increase by 3.5%, and a slightly higher EBITDA margin,” he said.

Nidhi Dhruv, also a VP and senior credit officer at the research firm, observed there are similar trends in Asia Pacific, although with “some differentiating factors”.

“We are expecting average revenue growth of about 2.2% for 2026,” driven by three key factors – “increasing data and broadband consumption and migration to higher speed tiers… increasing industry consolidation… [and] our expectation for more enterprise revenue,” said Dhruv.

She also highlighted the diversification by telcos into adjacent businesses. 

“We have seen telcos in the region already investing in things like mobile advertising, cybersecurity or even digital banks. But what we are now expecting is APAC telcos to invest a significant amount towards AI, and that includes datacentres and more tech-related businesses that will take centre stage in the next two to three years,” she said.

Last but not least, Cintia Hodge, a lead analyst in Moody’s corporate finance group, said telcos in LatAm are also “balancing growth with financial health through margin recovery, disciplined capex [capital expenditure] and strategic consolidation. We expect solid performance in 2026 supported by macroeconomic recovery, easing inflation and a shift towards more efficient operating models.”

In summary, Winzer said the global telco sector will be shaped by several key trends, including the move into adjacent businesses and M&A, as mentioned above.

Others trends are: The continual rise in data demand across all regions, “pushing operators to expand broadband access and invest in next-generation networks, even as the pace of large-scale infrastructure investments begins to slow”; a greater focus on operational efficiency; the acceleration in technological innovations, such as GenAI; cybersecurity; and regulatory and policy developments.

Lenny Ajzenman, associate managing director, remarked that the “global telecommunication service provider sector stands at a pivotal moment, shaped by robust demand for data, ongoing consolidation in some regions, and operational efficiencies that continue to underpin growth worldwide”.

- Anne Morris, Contributing Editor, TelecomTV