Europe’s digital communications market was worth around €1 trillion in 2023, equivalent to 4.7% of European GDP, according to the State of Digital Communications 2025 report from Connect Europe and Analysys Mason.
The study suggests we’ve reached a “now-or-never” moment for Europe to stay in control of its connectivity value chain, with leadership in 5G, FTTH, 6G and AI-driven network innovation at stake.
The report estimates total investment across the wider market – spanning telecom services, network equipment and content and applications – at €115.5 billion, with telecom operators accounting for 60% of the total. Connect Europe members’ connectivity services are used by 276 million Europeans, or 61.5% of the population.
However, the authors point to weakening sector fundamentals, with telecom investment falling for the first time in seven years. Total telecom investment in Europe declined by 2% from €59.1 billion in 2022 to €57.9 billion in 2023, despite the EU still being “far from achieving” Digital Decade targets. The report says European operators “effectively absorbed inflation” on behalf of customers, with revenue down 4.4% in real terms in 2023, and mobile ARPU falling 5.9% year-on-year in real terms to €14.8.
Europe continues to trail on 5G Standalone coverage, reaching 40% of the population at end-2024 compared with 91% in North America and 45% in Asia-Pacific, despite the number of commercial 5G SA networks in Europe increased from 10 in 2023 to 19 in 2024. The report also notes Europe has 16 Open RAN trials and commercial deployments by end-2024, ahead of North America’s 10 but behind Asia and Japan’s 24, with 52% of surveyed European operators having deployed some AI functionality for RAN automation and optimisation or started trials.
Overall 5G coverage in Europe is forecast to reach 87% of the population by end-2024, but still behind South Korea (99%), the US (98%), Japan (97%) and China (90%). Median mobile downlink speeds in Europe are cited at 71.0Mbit/s, below the US, South Korea and China, while European operators had spent EUR29 billion at spectrum auctions for principal 5G bands by October 2023.
On fixed networks, the report estimates gigabit-capable coverage at 82.5% in 2024, versus 99.0% in China and 97.6% in South Korea, while Europe’s FTTH coverage (excluding FTTB) is put at 70.5%. It forecasts more than 8% of the European population – at least 45.4 million people – will still lack access to a fixed gigabit connection by 2030, and estimates a further EUR109 billion in FTTH investment would be required to reach 99% population coverage.
The report also highlights market fragmentation and constrained returns, citing 41 mobile operating groups in Europe with more than 500,000 customers in 2024, compared with five in the United States and three in South Korea. It flags high capital intensity at around 21.4% for Connect Europe members in 2023 and a net debt/EBITDA ratio of 2.57.
