5 ways digital identity is driving telcos growth in 2025

European telecommunications providers (telcos) continue to navigate a complex landscape that is defined by fragmented customer experiences, rapid technological advances, sophisticated cybercrime, intensifying competition, and growing regulations. 

Many telcos operate with siloed systems, managing multiple brands and services across markets with different legacy infrastructure and authentication processes. This forces customers to juggle different login credentials for different services, with accounts often tied to products rather than a unified user profile. This disjointed setup undermines the user experience, increases fraud risk, and complicates compliance. 

At the same time, telecom companies are under pressure from tech giants, who are gaining market share by offering seamless digital experiences built around customer profiles—not just the products that the customers use. In fact, customers are increasingly viewing original equipment manufacturers as viable alternatives to traditional telcos— significantly risking customer ownership. For instance, a survey by Oliver Wyman found that 27% of 18–24-year-olds and 20% of 25–34-year-olds would consider subscribing to Apple for mobile and internet services, if given the option. 

Additionally, while Know Your Customer (KYC) requirements are nothing new for telcos, the rise of eSIMs, combined with a shift toward 24/7 online self-service on digital platforms, forces telco providers to reinvent their compliance and operational models. eSIM technology is transforming how consumers connect to mobile networks, increasing the pressure on telcos to balance security, efficiency, and customer expectations for seamless, on-demand service. 

A unified digital identity infrastructure offers telcos a practical solution to many of the aforementioned challenges and others. It simplifies customer access across brands, improves security, and eases compliance with regulations. It also allows telcos to compete more effectively with global tech giants, who have already mastered seamless customer journeys through standardised customer profiles and deeply integrated user experiences. 

This blog explores five ways digital identity helps telco operators in the EU address some of their most pressing challenges in 2025. 

In today’s saturated market, telecom companies are under pressure to diversify their offerings and unlock new revenue streams. Seamless access to bundled services has therefore become a strategic priority. According to EY, 92% of telecom CEOs view network-as-a-service models to be essential to future growth. This shift signals a broader industry trend: moving beyond basic connectivity to monetise value-added services—everything from TV and cloud storage to financial products and IoT platforms. 

Changing consumer behaviour is also reinforcing the need for telcos to offer bundled, value-added services. For example, in an international survey of more than 8000 participants, 49% of respondents said that they would rather leave their wallets at home than their smartphone. This highlights the smartphone’s evolution into a hub for daily life—managing not only communication, but also payments, identity, and others. Many telcos are already capitalising on this by bundling financial services into their offerings. For instance, Turkcell’s Paycell platform in Turkey enables both in-person and online transactions. 

Digital identity platforms enable this convergence. A reusable, secure ID allows customers to access multiple services— subscriptions, cloud platforms, and financial tools—through a single login, reducing friction and improving adoption rates. From a technical perspective, digital identity platforms offer pre-built APIs and software development kits (SDKs) that simplify integration across apps and partner portals. This speeds up time-to-market for new service bundles. 

For example, Proximus in Belgium has integrated digital identity app itsme^® into the Proximus+ app, enabling users to securely log in and seamlessly access a wide range of services, from core telecom offerings to additional features enabled through strategic partnerships. 

Additionally, for telcos operating multiple brands, a shared digital identity can unify the customer journey across different tiers—premium, mainstream, or budget. This makes it easier for users to access services and move between offerings within the brand family, strengthening retention and customer stickiness.

For example, Telia, a leading telcos company in the Nordic and Baltic regions, operates multiple brands catering to various market segments. To streamline customer experiences across these brands, they implemented a centralised identity solution known as the Telia Identification Broker Service. 

For legacy telcos facing pressure from lower-cost competitors, delivering a seamless, end-to-end experience is no longer optional—it’s become a key differentiator. According to Salesforce, communications service providers are falling behind tech and e-commerce companies when it comes to customer satisfaction. The software company also highlights how dissatisfaction with online experiences extends into the B2B sector, with 39% of respondents reporting frustration when managing accounts online, and 34% expressing dissatisfaction with self-service tools.  

This growing dissatisfaction is a key driver of churn, especially among younger, digital-native consumers who are more willing to switch providers with more intuitive self-service options. The adoption of eSIM technology amplifies this trend by making it easier than ever to switch providers—entirely digitally, without needing to obtain a physical SIM card or manually replace it in the device.  

Digital identity can help telcos in addressing this by:  

• Overcoming identity fragmentation: One of the biggest barriers to a smooth customer experience in telcos is identity fragmentation. Customers are often forced to authenticate themselves repeatedly across different channels, leading to fragmented login and verification processes that create unnecessary friction. By adopting unified digital identity platforms, telcos can enable seamless login across services, reinforcing their premium positioning. For example, the itsme^® digital identity platform enables passwordless, multi-factor authentication across mobile, web, and in-store touchpoints. This reduces login friction while enhancing security across services. 

• Enhancing customer service: Digital ID tools fully digitise customer onboarding and automate KYC compliance, which reduces friction in the face of new customers. Moreover, by allowing customers to share a verified identity with a single click, digital ID tools eliminate the need for repetitive and cumbersome identity checks. By serving as a secure, passwordless login method, digital identity tools eliminate the hassle of remembering credentials and reduce the risk of fraud for both users and providers.

Security has become a defining challenge for telecom operators, especially considering the rise of AI-driven attacks that are more targeted and adaptive, putting pressure on telcos to strengthen their defences. According to EY, the top risk facing telcos in 2025 is underestimating changing imperatives around privacy, security, and trust. Forbes echoes this, noting that cybersecurity and network resilience are rapidly becoming core business priorities for telcos in the face of rising threats and expanding regulatory demands.  

Consumers are also increasingly aware of these issues. According to a survey, 1 in 4 customers is concerned about how telcos and mobile operators handle their personal data, and just 14% say that they trust them with it. This erosion of trust is a serious threat to long-term customer relationships. 

Digital identity can help telcos in addressing this through:

• Better KYC and data privacy: Digital identity platforms give telcos a powerful way to enhance security while simplifying the customer experience. By integrating KYC processes, these platforms accelerate onboarding—both online and in-store—and ensure compliance for services like eSIM activation and mobile payments. Additionally, digital ID systems support data minimisation by giving customers control over what personal data is shared and with whom, addressing growing privacy concerns and supporting compliance with GDPR. 

• More trust, less fraud: Multifactor, passwordless authentication further strengthens security, significantly reducing risks such as phishing, identity theft, and credential breaches, while simplifying KYC for both customers and providers. This opens new opportunities for telcos as they expand into high-trust sectors such as finance, healthcare, and government services. For instance, Proximus launched in Belgium a “teleconsultation app” called Doktr, which enables patient to access accredited doctors via video calls. Customers use the itsme^® digital identity to login, ensuring compliance with privacy regulations while enjoying accessible care.

Regulation is not just a legal or compliance issue for telcos operators, but a top-tier strategic concern. According to McKinsey, European telco leaders identify regulation as one of the top three most pressing challenges facing the industry. Below are ways that digital identity can help them with compliance:

• GDPR continues to serve as a global benchmark for privacy, but its enforcement is evolving and expanding. As telcos explore data-driven business models, they are increasingly expected to handle customer data with greater transparency and accountability. With the ePrivacy Regulation nearing adoption, telcos will also face heightened requirements for managing consent and metadata with greater precision. Digital identity plays a crucial role in helping telcos navigate these EU regulations by enabling user-controlled data sharing, enforcing privacy-by-design principles, and supporting data minimisation. 

• While KYC requirements in telecom are not new, the shift toward digital channels is exposing new friction points. The rise of online onboarding and remote eSIM provisioning challenges telcos face to implement electronic KYC (eKYC) processes seamlessly while meeting regulatory standards. Digital identity tools allow telcos to verify customer identities remotely with full reliability—without adding friction to the user experience. Additionally, the NIS2 Directive requires telecom operators to implement strict cybersecurity measures, including secure access management and traceable user actions—both of which are supported by robust digital identity systems.  

• The European Digital Identity Regulation governing identity verification is tightening across the EU, pushing telcos to rethink how they collect, store, and validate customer identities at scale. Implementing trusted digital ID systems allows operators to meet these stricter requirements efficiently, enabling secure, user-centric identity verification while maintaining compliance across markets. 

• The European Electronic Communications Code (EECC) strengthens obligations for telecom operators around secure user onboarding, fraud prevention, and continuity of access—especially as eSIM and remote provisioning become more widespread. At the same time, the Digital Services Act (DSA) introduces new transparency and accountability rules for telcos offering platform-like digital services. Digital identity tools help telcos meet these evolving compliance demands by enabling strong customer authentication, automating KYC processes, and supporting data minimisation through selective, consent-based verification. Features like multifactor login and passwordless access also reduce the risk of SIM swap fraud and identity theft, supporting alignment with EECC security principles. 

eSIM adoption is becoming increasingly relevant for telcos, as it reshapes market dynamics and customer expectations, and fans the flames of competition in an already-saturated sector.  

According to McKinsey, technologies like eSIM are lowering barriers to entry to the telcos market, enabling non-traditional players — including airlines and tech companies — to offer mobile connectivity directly to consumers. As eSIMs eliminate the need for physical SIM cards, they make it easier and faster for users to switch providers, activate new plans remotely, or access temporary data packages while travelling.  

As eSIM technology reshapes the telecom landscape, telcos face mounting pressure to differentiate through flexibility and seamless user experiences. Verified digital identity is becoming increasingly essential in this shift, facilitating remote onboarding and streamlining verification to activate eSIM safely with guarantee of user true identity:

• Compliance with regulations: Digital ID technology enables telcos to meet regulatory requirements tied to KYC and data protection without sacrificing speed or security. By ensuring only verified users can access network services, digital ID tools help mitigate risks such as account takeovers, SIM swap fraud, and other identity-based threats. For example, digital ID platform itsme^® adheres to the highest compliance and security standards in the EU, including eIDAS high-level assurance, GDPR compliance, and ISO/IEC 27001:2013 certification.

• Lowering the barrier to entry: Digital identity platforms facilitate eSIM implementation by providing a reusable, verified identity that users can share with a single click. This combination of seamless user experience and stringent security guarantees robust, trustworthy identity verification.

• International reach and roaming simplification: digital identity platforms ensure compliance with cross-border regulations and help manage international roaming agreements. By verifying and authenticating users across different jurisdictions, digital identity tools allow customers to enjoy the flexibility of eSIM technology without compromising security or compliance. For instance, itsme^® digital ID platform enables secure cross-border identity verification in 17 European countries by providing a trusted, GDPR-compliant authentication method.