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Report: Europe still trails global peers in 5G, FTTH

February 18, 2026

Connect Europe has unveiled its 2026 State of Digital Communications report, with research conducted by Analysys Mason.

The report highlights a growing contradiction at the heart of Europe’s digital economy. Europe’s digital communications ecosystem now represents 5 per cent of EU GDP, underpinning competitiveness, security and technological sovereignty – yet total telecom investment, while still high at €64.6 billion in 2024, declined by 2 per cent 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

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

On fixed networks, FTTH coverage reached 77.2 per cent of European households in 2025, up from 70.9 per cent in 2024, while gigabit-capable networks covered 86.6 per cent. Europe performs well on FTTH relative to the US, 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 US.

Digital Decade targets at risk

Despite continued deployment, Europe’s Digital Decade objectives are increasingly at risk. Total telecom capex declined by 2 per cent 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 per cent 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 US, €173 in Japan and €151 in South Korea. Connect Europe members continue to play a stabilising role, accounting for 54 per cent 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.

Alessandro Gropelli, Director General of Connect Europe, commented: “Telecom companies are trying hard to expand Europe’s tech stack and to build solid digital networks, but we are a regulated sector and we will not be able to deliver without major reform and a fresh approach to merger policy.”

Rupert Wood, Research Director at Analysys Mason, added: “End-user spend and investment per capita remain substantially lower than in the USA, Japan, and South Korea. Low prices may be perceived as good for consumers and businesses in the short term, but they are not fit for encouraging long-term investment in new, innovative services, in network evolutions, or for investing in network coverage.”

Categories: 5G, Articles, Broadband, FTTH, Markets, Research

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