Network spend to reach $520 billion by 2025, telcos to account for 53%: Report

The Capex of telco, webscale, and carrier-neutral operators which stood at $420 billion in 2019, is expected to reach $520 billion by 2025 and telcos will account for 53% of it, said a report by an independent analyst firm MTN Consulting.

While the market share of telcos will increase from 9% in 2019, webscale operators will grow from 25% to 39% in the same timeframe; and, carrier-neutral providers will add 8% of total Capex in 2025 from their 2019 level of 6%.

The telco employee base is also expected to erode from 5.1 million in 2019 to 4.5 million in 2025 on account of deploying automation technologies, casting off networks to the carrier-neutral sector, and the subsequent increase in demand for software and IT skills, the report added.

The cost of the average telco employee will rise significantly in the same timeframe, as they will require many of the same software and IT skills currently prevalent in the webscale workforce.

In contrast, webscale operators’ employee base will grow from 2.8 million in 2019 to 4.8 million by 2025 while the carrier-neutral sector will have a headcount of 119 million in 2025.

Telecom network operator (or telco) revenues are on track for a significant decline in 2020, with the industry hit by COVID-19 even as webscale operators (WNOs) experienced yet another growth surge as much of the world was forced to work and study from home, the report added.

For 2020, telco, webscale, and carrier-neutral revenues are likely to reach $1.75 trillion, $1.63 trillion, and $71 billion, amounting to an on-year growth of -3.7%, +12.2%, and 5.0%, respectively.

By 2025, the webscale sector will dominate with revenues of approximately $2.51 trillion, followed by $1.88 trillion for the telecom sector and $108 billion for carrier-neutral operators (CNNOs).