Europe’s telecom sector, long seen as a global pioneer, is showing signs of strain, according to new findings from the Kearney European Telecom Health Index. The Index reveals stark contrasts in sector health across 20 European markets, with many of the continent’s largest countries ranking in the bottom half. The Index assesses telecom health using five key factors: financial returns, commercial stability, technology deployment, business environment, and customer sentiment. Findings are based on 21 standardized metrics, including proprietary customer research and industry benchmarks. Claudio Campanini, Kearney Partner and Lead of Communications, Media, and Technology in Europe, said: “Europe was the early driver and pioneer in shaping the modern telecom landscape. But today, many of its major markets are struggling to sustain healthy growth, making renewed focus on market structure, commercial strategy and infrastructure monetization essential.” Despite their limited scale, five of the top six healthiest telecom markets have populations under 12 million. Countries like Norway, Sweden, and Switzerland score well across all Index factors, driven by high 5G and fiber penetration, commercial performance, and strong customer satisfaction. These markets show that scale is not a prerequisite for sector vitality—effective execution is. In contrast, 70% of Europe’s population lives in countries in the Index’s bottom half, including major economies like Germany, the UK, and Italy. Collectively, these bottom ten markets account for nearly two-thirds of the Index’s total GDP—but trail well behind smaller peers in telecom sector health. Romania stands out for its great high customer sentiment score, being actually one of the highest in all Europe, only behind Finland (91), Netherlands (88), and equal to Norway (86). This reflects strong overall satisfaction among telecom users, even as broader market challenges remain. Kearney’s research shows that more consolidated mobile markets—those with three main mobile network operators (MNOs)—tend to outperform four-player markets on financial returns, with no major loss in customer satisfaction or network quality. For instance, three-player markets average a 35% EBITDA margin and a 78 customer sentiment score, compared to 31% margin and a 80 customer sentiment score for four-player markets. Europe has made significant progress in rolling out 5G and fiber infrastructure yet continues to lag behind North America in monetizing these investments. With 5G, for instance, despite a rollout that covers a large majority of the continent’s population, only 38% of European mobile subscribers have adopted it, compared to 51% in North America. Countries such as Spain, Norway, and Switzerland lead the way in 5G adoption and commercialization, while Poland, Romania, and Belgium remain behind in both deployment and penetration. On the fiber front, the Index finds that countries with high fiber rollout and strong customer take-up—such as France and Portugal—deliver better returns and higher customer satisfaction. In contrast, markets with extensive deployment but weak take-up underperform financially, signaling a need for more effective marketing and pricing models. Customer satisfaction correlates most strongly with network coverage, speed, perceived value and not necessarily low pricing. High-scoring countries on customer sentiment, including Sweden and Switzerland, report spending on telecommunication services as a proportion of household income up to 1.8%, well above the Index average. Despite this, customers in these countries are among the most satisfied, indicating they’re willing to pay more for better service. Kearney will publish the full European Telecom Health Report later this year. The report will provide a detailed analysis of key trends, offering insights into the current state of this vital sector and outlining the prerequisites for a healthy and sustainable market.