This report examines the latest financial results from Amdocs, CSG, NETSCOUT, Spirent, and Tecnotree to see what light they shed on the Telco Software market trajectory.
Omdia view
Summary
Omdia estimates that the market for telco software (BSS/OSS) and associated services grew around 1% last year, somewhat below the 3% growth in 2023 – as discussed in the Telco Software Market Forecast Report: 2024–30 (see Further reading). We forecast market growth will remain around 1% in 2025 as overall telco capex budgets remain constrained. However, we anticipate growth will recover to around 3% in 2026 as telcos seek to increase automation and improve customer experience.
Recent results from telco software vendors support our view of a reasonably flat market this year with particular weakness in OSS. On the plus side, industry heavyweight Amdocs reported revenue growth of around 4% year on year (YoY) for the first six months of the year on a pro-forma basis, excluding the disposal of some non-core businesses. BSS peer CSG reported 2% revenue growth in 1H25 but is hopeful that its full-year revenue will grow by as much as 4%. However, fellow BSS vendor Tecnotree reported a 1H25 revenue reduction of 2% YoY in euros with headcount down 19% YoY as the company pivots “towards more AI-driven efficient execution.”
On the OSS side, Netscout reported flat service assurance revenue in 1H25, although the spend by telecom operators was down YoY. Across both service assurance and cybersecurity segments, Netscout’s revenue from service providers declined 13% YoY. Fellow service assurance vendor Spirent reported a 2% decline in revenue from Lifecycle Service Assurance in 1H25.
Spirent is still awaiting approval from the Chinese authorities for its acquisition by Keysight. Meanwhile, Optiva is in negotiations with its debt holders about a potential merger with another company that would allow it to restructure its balance sheet and continue operating. These examples of consolidation reflect the challenging market conditions that many of the smaller telco software vendors face.
Telco software 2Q25 results recap
Several of the publicly listed companies that are active in the telco software market have now published their 2Q25 results. Ericsson and Nokia had little to say about their BSS/OSS business in their press releases or conference calls; it is a relatively small part of their business. However, the results of Amdocs, CSG, Netscout, Spirent, and Tecnotree all shed some light on the telco software market trajectory.
Below we summarize the key points from their results and discuss the planned financial restructuring of Optiva.
Amdocs sees rich pipeline but keeps eye on macro uncertainty
Amdocs reported revenue for the quarter ending June (its third fiscal quarter), down 8.4%. Adjusting for the disposal of certain low-margin activities (e.g., Vubiquity’s transactional VOD business), revenue grew 3.5% YoY, in line with the 4.0% growth in the March quarter.
For its fiscal year, ending September, Amdocs expects revenue to grow between 2.4% and 3.4% on a pro-forma basis. This is slightly higher at the mid-point (2.9%) than the last guidance update of 1.7–3.7% (2.7% at the mid-point).
Recent deals that Amdocs highlighted include a digital transformation project for BT, B2B modernization for Elisa, and a GenAI-related deal with a leading service provider in the US for its billing, commerce, and order management. Amdocs is also working with e& in the United Arab Emirates to transform its customer-facing channels using its amAIz platform.
The company noted its 12-month order backlog (equivalent to around 90% of the last four quarters’ revenue) was up 3.0% YoY on a pro-forma basis, and its pipeline of new opportunities was “rich.” However, it continues to look out for any impact of the uncertain macroeconomic environment on its customers’ spending.
To expand its fiber engineering services offering, Amdocs recently closed a deal to acquire the telco network engineering business of Mobia, a privately owned Canadian company. The consideration was not announced but the impact on next quarter’s revenue was said to be immaterial.
CSG sees slight headwinds in North American broadband market
CSG reported 2Q25 revenue growth of 2% YoY, slightly better than the 1% growth in 1Q25. Revenue guidance for the full year ($1,210–1,250m, up 2.7% at the mid-point) was unchanged. On the conference call with CSG, the CFO said that revenue growth in 2026 was likely to be in the range of 2–4%. 2025 growth is below the company’s long-term target of 2–6% due to headwinds in the North American broadband market and slightly elongated sales cycles.
The company cited new wins in the telecom vertical with Orange Business and Liberty Communications, in addition to new customers in financial services. The Orange Business team selected CSG to simplify its quote-to-cash process across more than 25 different countries by leveraging CSG’s Configure, Price, Quote (CPQ) solution. Liberty Puerto Rico has renewed its contract for integrated billing and subscriber management across residential and B2B fixed-line subscribers.
Netscout service provider revenue declined 6% YoY in June quarter
Netscout reported revenue growth in its first fiscal quarter to June of 7% YoY, an improvement from 1% growth in the quarter to March. Revenue from enterprises grew 18% YoY, more than offsetting the 6% decline in revenue from service providers. However, the decline in revenue from service providers was more muted than in the quarter to March (18%).
Revenue from cyber solutions grew 18% while service assurance grew just 1% (albeit better than the 1% decline in the March quarter). The 1% growth in service assurance was driven by enterprise customer spending, which offset a decline in service provider spending. Group revenue guidance for its year ending March 2026 (0–5%) was unchanged.
Optiva negotiates with bond holders on potential merger
Optiva has yet to release its June quarter results, but on July 18 it disclosed an agreement with holders of approximately 85% of its senior debt. Under the terms, those creditors have agreed to defer exercising their rights related to payment defaults for 45 days. The company had been facing a scheduled repayment of $109m in principal and $5m in accrued interest on July 20.
The agreement gives Optiva some time to negotiate with its lenders and third parties regarding a potential merger. Optiva’s current shareholders are expected to receive only a nominal consideration for their shares (currently worth $5m at the prevailing share price). The lenders will exchange their debt for a combination of shares in a newly merged company and new loan notes of lower value than the existing debt.
Optiva had approximately $12m cash on hand as of July 13, 2025, to ensure business continuity and meet its commitments to customers, employees, and suppliers.
Spirent Communications sees ongoing weakness in telecom demand
Spirent reported revenue growth for 1H25 of 5% YoY and orders were up 9%. The company noted that its AI Data Center testing solution was gaining traction as enterprises modernize their Ethernet network fabrics for high-performance AI workloads. The company acknowledged that “market conditions are likely to remain challenging in the near term, particularly in the telecom segment.” One bright spot within telecoms is 5G assurance solutions, where demand continues to build. Nonetheless, revenue from the Lifecycle Service Assurance segment fell 2% YoY due to ongoing delays in operators upgrading to 5G Standalone (SA) and increasing commoditization in device service experience testing. Spirent observed that while the rollout of 5G SA has resumed, its pace remains measured rather than accelerated.
The acquisition of Spirent by Keysight has been approved by UK and US authorities subject to the disposal of certain assets (high-speed Ethernet testing, network security testing, and radio frequency channel emulation) to VIAVI. Keysight expects the approval by Chinese authorities to come on or before September 29, which is the “long stop date” for the acquisition agreement.
Tecnotree sees full-year revenue growth in constant currency but not necessarily in euros
Tecnotree posted 1% YoY revenue growth in constant currency terms for 2Q25 but reported a 7% decline in euro terms. The discrepancy highlights Tecnotree’s significant exposure to markets with sharply depreciating currencies, such as Argentina and Nigeria. For 1H25, revenue fell 2% YoY in euros.
Tecnotree has raised its full-year sales growth guidance in constant currency, widening the range from low–mid single-digit growth to low–high single-digit growth. This follows 2.7% YoY growth in 1H25 on a constant currency basis. The company noted continued expansion in the mobile virtual networks (MVNX) segment and highlighted the importance of systems integrators HCL Tech and Accenture in driving its growth. Headcount declined 19% YoY at the end of June as the company pivots “towards more AI-driven efficient execution.”
Appendix
Further reading
Telco Software Market Forecast Report: 2024–30 (July 2025)
Author
James Crawshaw, Practice Leader, Service Provider Transformation
