Telcos face painful year ahead – IDC

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May 21, 2026 | 12:00am

MANILA, Philippines — Telco providers globally are expected to face one of their toughest years on the double whammy of elevated energy costs and slower consumer spending, highlighted by the first quarter results of Philippine players.

In its forecast, the International Data Corp. (IDC) said telco spending may go up by 1.8 percent this year to $1.58 trillion, slower than the two-percent expansion last year to $1.55 trillion.

IDC worldwide telecom services research director Kresimir Alic said telcos would bear the brunt of higher power costs, triggered by recent tensions in oil-producing region Middle East.

Moreover, the oil price shocks are expected to hike the cost of network hardware, and telcos may have to scale back their infrastructure plans. The resulting inflationary pressures will also compel consumers in developing economies like the Philippines to spend less.

Still, Alic said telcos can depend on the stability of connectivity demand during tough times. He pointed out that connectivity services have become a staple in the digital age, so consumers will allocate a budget for them no matter what.

There is also a chance that telcos would grow faster this year, but that relies on the resolution of geopolitical conflicts and reduction in energy prices, both of which are uncertain.

In 2025, the IDC monitored a two-percent growth in telco spending to $1.55 trillion, from $1.52 trillion in 2024, lifted by higher demand from Europe and the Middle East.

The European and Middle Eastern markets recorded a three-percent expansion to $491 billion, as telcos were given permission to adjust their prices relative to inflation.

However, revenue growth in the Americas was slower at 1.8 percent to $576 billion, and it was the slowest in Asia-Pacific at 1.4 percent to $484 billion. In Asia, telcos are itching for a catalyst in the face of economic challenges in China and Japan.

In the Philippines, telcos are searching for ways on how to overcome the country’s saturating market. Industry leader PLDT Inc. posted a two-percent drop in profit in the first quarter because expenses went up faster than revenue.

Ayala-led telco Globe Telecom Inc. had it worse, with its profit sliding by 20 percent during the period due to debt payments and peso depreciation.

Youngest telco Dito CME Holdings Corp. is dying to turn in its maiden profit, which is still a far reality, as the company’s net loss widened by fourfold in the first quarter.