5 February 2026 | AI, efficiency and profit

AI could profoundly affect European telcos’ profitability: the industry massive capital requirements so small improvements in returns on capital employed (ROCE) and opex can translate into big numbers.

ING says European telcos’ capex was some €50 billion in 2024: in that year, the European Telecommunications Network Operators Association (ETNO) said return on capital employed (ROCE) fell from 9.1% in 2017 to 5.8% in 2022; Kearney reckoned it dropped from 6.7% in 2014 to 5.9% in 2023.

“The European telecommunication sector has among the lowest…ROCE in Europe, alongside the highest capital investment demands. This has resulted in ROCE being below weighted average cost of capital (WACC) for over a decade, impacting total shareholder returns.”

Margherita della Valle, CEO, Vodafone Group, May 2023, earnings call for Annual Report 2023