Inflation and Energy Costs Propel Global Telecom Spending to $1.6 Trillion in 2026

Image: Illustrative image · 中华人民共和国工业和信息化部 (Ministry of Industry and Information Technology) · Public domain · Source

IDC forecasts that worldwide telecom and pay-TV spending will hit $1.6 trillion in 2026, boosted by inflation and rising energy prices, with direct-to-device partnerships emerging as key growth drivers.

The global telecommunications and pay-TV sectors are set to see spending reach $1.6 trillion in 2026, according to market researcher IDC. This forecast reflects a 2.3% increase year-on-year, primarily influenced by ongoing inflationary pressures and elevated energy costs resulting from geopolitical conflicts in the Middle East and Ukraine.

Inflation's role in driving cost increases is prompting telecom operators to raise tariffs as a defensive measure to preserve profit margins. IDC suggests that such pricing adjustments will underpin continued market growth through the end of 2026 and into 2027.

Geographically, the Americas are projected to experience the strongest growth in telecom spending, followed by Europe, the Middle East and Africa (EMEA), and then the Asia-Pacific region. Within the telecom segments, mobile services are expected to maintain their dominant position as the largest revenue contributor. This is due to expanding data consumption and the proliferation of machine-to-machine communications, which are compensating for declines in traditional voice and messaging expenditures.

An emerging opportunity identified by IDC lies in the integration of satellite broadband services, especially through low Earth orbit (LEO) satellites. While satellite broadband’s market share remains limited and benefits mainly providers like SpaceX's Starlink and Amazon's Project Kuiper (Leo), the potential for growth exists in direct-to-device (D2D) partnerships.

These partnerships between satellite providers and terrestrial telecom operators offer a strategic advantage by extending network coverage into underserved areas and enabling differentiated service offerings. Kresimir Alic, IDC’s Research Director for Worldwide Telecom Services, emphasizes that the future of connectivity hinges not on choosing between ground or satellite networks but on harmonizing both as complementary technologies.

Alic notes, "Operators that treat satellites as an extension of their networks, rather than a rival to them, will be better placed to improve customer loyalty, protect revenues and connect the next billion users."

As operators adapt to inflationary and energy cost challenges, strategic collaborations with satellite providers and a focus on expanding data-driven mobile services appear key to sustaining growth in the evolving telecom landscape.