A decisive moment for Europe’s connectivity, new report shows policy choices can no longer wait

The report highlights a growing contradiction at the heart of Europe’s digital economy. Europe’s digital communications ecosystem now represents 5% of EU GDP, underpinning competitiveness, security and technological sovereignty – yet total telecom investment, while still high at €64.6bn in 2024, declined by 2% for the second year in a row, and mobile revenues per user are lower than they were ten years ago. This is not a cyclical slowdown, but the result of structural weaknesses, with high levels of regulation and persistent market fragmentation continuing to undermine investment capacity. This comes at a decisive political moment. With negotiations on the Digital Networks Act (DNA) now underway and the work on the review of the EU Merger Guidelines being finalised, the data sends a clear message: policy change can no longer be deferred.

A €1.09 trillion digital communications ecosystem, with telcos contributing to build the European tech stack

Europe’s digital communications ecosystem – spanning telecom services, network equipment, and content and applications – reached a total market value of €1.09 trillion in 2024, equivalent to 5% of European GDP. This places digital communications firmly among Europe’s most strategic industries, underpinning competitiveness, security and technological sovereignty. Telecom operators continue to invest in FTTH, gigabit-capable networks, 5G deployment, satellite and international subsea cables, while increasingly expanding into new areas. At the end of 2025, operators accounted for around 19% of Europe’s data centres and approximately 750 operator-owned edge nodes, strengthening Europe’s digital resilience and its ability to process data closer to users.

At the same time, innovation is moving up the value chain. European operators remain leaders in key areas, accounting for 57 Open RAN trials and deployments in 2025 and nearly 40% of global network API announcements, while rolling out enterprise solutions enabled by AI, sovereign cloud offers and preparing the ground for direct-to-device satellite connectivity. Cybersecurity continues to be a growing pillar of this effort, with revenues reaching €5.3 billion, up from €3.2 billion in 2020.

Progress on 5G and FTTH, but Europe still trails global peers on key metrics

Network coverage continues to expand across Europe, yet competitiveness gaps remain. By the end of 2025, 5G population coverage reached 94.9%, up from 87% in 2024. Despite this progress, Europe still lags behind South Korea (99.9%), the USA (98.4%), Japan (97%) and China (96%). The gap is even more pronounced when looking at adoption and advanced capabilities. In 2025, 5G accounted for just 43% of mobile connections in Europe, compared to over 70% in the USA and China. On 5G Standalone, Europe remains behind most major peers, with 63% population coverage, versus 93% in China and 81% in the USA.

On fixed networks, FTTH coverage reached 77.2% of European households in 2025, up from 70.9% in 2024, while gigabit-capable networks covered 86.6%. Europe performs well on FTTH relative to the USA, but it still trails China and Japan. On overall gigabit availability and network performance, Europe remains behind all peers, with median fixed download speeds of 171 Mbps, compared to 289 Mbps in the USA.

Digital Decade targets at risk as investment declines and revenue per user is the same as a decade ago

Despite continued deployment, Europe’s Digital Decade objectives are increasingly at risk. Total telecom capex declined by 2% in 2024, falling to €64.6 billion, driven primarily by slowing FTTH investment. At the current pace, 41.8 million Europeans will still be left without FTTH access by 2030, well short of the EU targets. This slowdown occurs in a context of structurally weak revenues. In 2024, mobile ARPU adjusted by GDP stood at €14.9 in Europe, down 2.4% year-on-year in real terms, and lower than a decade ago (i.e., it was €15.3 in 2015). By contrast, ARPU reached €26.1 in the USA, €21.7 in South Korea, and €21.3 in Japan. Also this year, the overall telecom investment per capita in Europe is behind that of global peers, with €118 per person in Europe, €217 in the USA, €173 in Japan and €151 in South Korea. Connect Europe members continue to play a stabilising role, accounting for 54% of all FTTH investment in 2024 (€17.2 billion). Yet sustained underinvestment at sector level reflects a broader structural problem.

Fragmentation and scale: the unresolved European challenge

Europe’s connectivity markets remain uniquely fragmented. In 2025, Europe counted 44 mobile network operators with more than 500,000 subscribers, compared to 8 in the USA, 4 in China and Japan, and 3 in South Korea. Fragmentation is also pronounced in fixed networks, with over 70 large fixed operators across Europe, as opposed to 28 in the US, 6 in Japan and 5 in South Korea. This lack of scale continues to weigh heavily on investment capacity, innovation and competitiveness - a reality increasingly recognised in Europe’s broader industrial and competitiveness debate.