S&P Global – Telecoms Credit Outlook, 2025

The report by S&P Global "Telecoms Credit Outlook 2025" explores the evolving credit landscape for telecom companies amidst changing market conditions. More favorable market and financing conditions, including slowing inflation, have eased margin pressure and improved capital market access through moderating interest rates. An increase in mergers and acquisitions (M&As) is observed as telecom companies seek consolidation in Europe, Latin America, and Asia-Pacific, and joint ventures in the U.S. for fiber access. The satellite industry faces challenges from a growing number of low earth orbit (LEO) players outcompeting medium earth orbit (MEO) and geostationary earth orbit (GEO) players. Key assumptions for 2025 include steady earnings growth, with average telco revenue growth expected to exceed 2% and EBITDA growth of 3% through 2026. There is heightened interest in digital infrastructure investments, such as data centers and telecommunications towers, providing asset monetization opportunities. Capex is expected to decline in markets with developed infrastructure, enhancing free cash flows. However, competition remains a significant risk, eroding pricing strategies and impacting returns on capital.