Financier №4 (40) 2025

The telecommunications sector is entering a new phase—digital, intelligent, and far more dynamic. This is not merely a shift in trends, but the beginning of a new technological era. The introduction of artificial intelligence services has already changed the structure of demand, opening up new areas for capital investment and innovation.

With Updated Drivers

In recent years, the global market for Radio Access Network equipment, software, and services has stagnated, absorbing massive investments associated with the rollout of the 5G standard. 2024 was the most challenging year for the industry in two decades: the telecommunications equipment market declined by 11%. However, according to a report by Dell’Oro Group, sector revenues began to grow in the first two quarters of 2025. Similar trends have been observed in the related segment of fiber-optic communication line (FOCL) equipment development and production, where revenue declined by 13% in 2024.

Five major players control over 90% of sales of radio network equipment, software, and services: Huawei, Ericsson (ERIC), Nokia (NOK), Samsung, and ZTE (ZTSTF). The first two companies hold dominant positions: their combined market share exceeds 60% in China and North America.

Dell’Oro Group experts currently identify several preconditions for continued positive trends in the industry.

Principle of the Thing

The sector’s further development will be driven by two technological trends: 5G Mobile Core Networks (MCN) and Multi-access Edge Computing (MEC).

The 5G Mobile Core Network (MCN) is the “brain” and “nervous system” of a fifth-generation mobile network, managing subscriber connections. It consists of servers and software responsible for user authentication, data management, and ensuring uninterrupted communications. From 2024 to 2029, this segment is expected, according to Dell’Oro Group, to grow in value by approximately 6% annually.

Multi-access Edge Computing (MEC) is a technology that shifts computing and data storage from remote cloud environments closer to the user—to the network edge, for example, at telecom operators’ base stations. This enables real-time data processing, significantly reducing latency and improving the performance of virtual-reality applications on mobile devices. Dell’Oro Group forecasts that the MEC market will grow at an average rate of 17% per year (for more information, see pages 10–11).

Next-generation AI-powered networks, known as AI-RAN, are set to transform the way networks operate. In 2024, NVIDIA (NVDA) unveiled an experimental AI platform for 6G, with Nokia becoming the first company to begin testing it. AI-RAN will enable networks to anticipate user behavior. For example, networks will be able to pre-allocate bandwidth for subscribers moving between cells. When a user moves through a city with a dense network of base stations, service is transferred from one station to another. Currently, this means the same device temporarily uses the resources of multiple base stations, remaining connected to one until a connection with the next is established. AI-RAN will predict subscriber movement and pre-connect devices to new access points, ensuring more stable connections and reducing operators’ costs. In the spring of 2025, Indonesia’s Indosat Ooredoo Hutchison, with the support of Nokia and NVIDIA, began deploying the world’s first commercial AI-RAN network. Huawei and Samsung are also working on similar projects, but Nokia currently appears to be the leader in this field.

Intellectual Contribution

Investors are increasingly interested in companies operating at the intersection of AI and telecom infrastructure. These include primarily Ericsson, Nokia, and Huawei, which—along with chipmakers and cloud-solution providers—are expected to be key beneficiaries of the rollout of 6G and AI-driven networks.

According to Ericsson, wireless technologies will account for more than one-third of new fixed-line connections in 2025, while mobile traffic is expected to double by 2030, with 80% of that volume carried over 5G networks. The Asia-Pacific region has already become the primary driver of global growth in this sector, accounting for nearly 40% of global industry revenue in 2024. Mordor Intelligence forecasts that this segment will grow at an average annual rate of 19% through 2030. Huawei, Ericsson, Nokia, and ZTE collectively account for approximately 70% of this market.

According to Market Growth Reports, the global market value of AI solutions for telecoms is expected to rise from $4.4 billion in 2024 to $102 billion by 2033, implying an average annual growth rate of 40.6%. Today, approximately 90% of telecom operators already use AI elements to optimize costs and improve network efficiency. Over the next five years, AI is expected to account for the majority of industry investment, increasing overall sector funding by 40%.

The benefits will accrue not only to traditional equipment manufacturers such as Huawei, Ericsson, and Nokia, but also to suppliers of specialized AI chips—primarily NVIDIA and Broadcom (AVGO)—as well as developers of AI-based solutions, most notably Alphabet (GOOGL).

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For more than 20 years, I've been watching readers change. There have been several shifts in recent years. Firstly, the reader became more impatient. Previously, a person would quietly spend a week for a book. Today the reader wants to understand the essence in 15 minutes. This is not a “simplification”, but an adaptation to overload.  We all live in a world where attention is the main deficit. Secondly, formats have become more flexible: there is a growing demand for audio, summaries, and visual solutions – infographics. People want to learn “meanwhile” – in the gym, driving, jogging. Thirdly, the goal has also changed. People used to read “for pleasure” or “because it's customary.” Now people read with precision – to solve a problem, improve their skill, and understand the topic. Practicality has become more important than aesthetics.
I bought a lot of books, like many who strive for development. Smart Reading became my answer – first for myself, then for thousands of people with the same habits and for those who want to develop, but are overloaded, distracted, and constantly on the move. We create a Summary Library – the essence of a book in 15-20 minutes. This is not a substitute for reading, but a springboard to knowledge, which helps quickly understand whether it is worth reading the whole book.
In a world where there is less time and more information, the short format has proved to be surprisingly in demand. The more we do, one thing becomes clearer: it is still important for a person to understand; just in different way. 

Political Geography

Sanctions restrictions have had a significant impact on the market for radio network equipment, software, and services. In 2023, authorities in 10 EU countries began phasing out Huawei and ZTE equipment, a process scheduled to be completed by 2029. In this environment, Nokia and Ericsson stand to benefit. For example, Ericsson won a tender to modernize the 5G network of Spanish telecom giant MasOrange, more than half of whose infrastructure had been built using Chinese equipment.

At the same time, Nokia’s and Ericsson’s combined market share in China fell from 12% in 2020 to less than 4% in 2025. This shift allowed Huawei to strengthen its position in the domestic market, which accounts for approximately 45% of global LTE/5G network deployments. This, in turn, enabled the company to maintain its pace of innovation. In 2023, Huawei introduced its own 5-nanometer Kirin 9000S processor, followed in 2025 by the 9020 version, which delivers 40% higher performance than its predecessor. Huawei has invested in more than 60 Chinese semiconductor manufacturers and is actively developing its own production of 7-nanometer AI chips.

Beyond the Horizon

Sixth-generation communications (6G) are still under development, but it is already clear that they will radically transform the telecom industry—and far beyond it. This new standard will elevate cloud computing to a new level, enhance AI capabilities, and pave the way for the widespread adoption of autonomous vehicles.

Nokia and Cisco (CSCO) are developing a joint 6G core architecture—an AI-powered platform designed to reduce network maintenance costs and improve network agility. Cisco is responsible for infrastructure and security solutions, while Nokia is developing the MCN technology. AMD (AMD) is supplying the AI processors for the project.

In July 2025, Japanese mobile operator Rakuten Mobile selected Cisco and Nokia as partners for the deployment of its 5G network core, signaling the success and relevance of this technological partnership.

The telecommunications industry is entering a new wave of technological change. The convergence of AI solutions, cloud services, and 6G networks is shaping the infrastructure of tomorrow. Established players such as Huawei, Nokia, and Ericsson continue to maintain leadership thanks to their experience and scale. Meanwhile, younger competitors—NVIDIA, Broadcom, and other suppliers of advanced microelectronics—are benefiting from the expansion of the telecommunications market.

Over the next decade, technological superiority will continue to determine the ability of industry players to rapidly deploy the most advanced solutions, particularly those related to artificial intelligence. This, in turn, will define the investment prospects of companies across the sector.