Carrier-neutral Operator Market Tracker, 4Q25: Data Centers Displace Towers as the Sector's Growth Engine, Powered by AI

This report reviews the growth and development of the carrier-neutral network operator (CNNO) market, tracking a wide range of financial stats for 47 CNNOs across the globe, from 1Q11 through 4Q25. 2025 marked a modest inflection point for this mature sector. After a flat 2024, revenues rose 3.6% to $101.4 billion (B), with growth accelerating through the year to +8.5% YoY by 4Q25. Capex climbed 11.3% to $43.8B, the fastest expansion in years. Net PP&E ended 2025 at $280.7B (+8.3% YoY), and headcount reached roughly 120,600 (+9.0% YoY, inflated by the Uniti-Windstream merger). Two forces drove growth: AI-related demand for data center capacity, and a revival of M&A that expanded the base of the sector.

The CNNO market is the smallest of the three operator segments tracked by MTN Consulting, alongside telco and hyperscale, but it sits at the center of both. Telcos long ago abandoned the fully integrated model; the telco of 2026 assembles its network from a mix of owned and leased assets. Years of tower, fiber, and data center divestitures have shifted a growing share of the world’s physical network infrastructure into CNNO hands, usually with leaseback provisions that convert telco capex into opex. Hyperscalers lean on CNNOs from the opposite direction: despite spending over $500B on capex in 2025, they still lease most of their fiber and a meaningful share of their data center capacity. This dual dependence is the CNNO sector’s advantage – it monetizes both the telcos’ retreat from asset ownership and the hyperscalers’ inability to build fast enough. Enterprises and governments round out the customer base, but telcos and hyperscalers remain the revenue anchors.

Asset reshuffling is constant in this sector. The best CNNOs have made a repeatable discipline of acquiring companies or discrete facilities, integrating them quickly, and extracting scale economies and cross-selling opportunities. This study focuses on the purely ‘neutral’ operators – those whose key customers do not also show up as key shareholders. China Tower fails that test, as its top three customers (the Chinese telcos) are its majority owners; we include it anyway, given its sheer size and China’s unique networks ecosystem, but the report flags its distorting effect on sector totals throughout.

Our figures are built bottoms-up from companies that are publicly traded now, or were public in the recent past; purely private players that report no audited financials cannot be credibly tracked. That boundary matters more than ever, because the AI capex boom is happening disproportionately on the private side. The largest data center transaction on record – the $40B purchase of Aligned Data Centers by a BlackRock/GIP, MGX and AI Infrastructure Partnership consortium (whose backers include Microsoft and Nvidia), announced in October 2025 – sits entirely outside our database, as does most of the record ~$52B of data center M&A completed in 2025. The boundary may shift in our favor, however. OpenAI and Anthropic filed confidential IPO prospectuses in June 2026, and China’s DeepSeek, fresh off a funding round at a ~$71B valuation, is preparing to file in late 2026 or early 2027, with plans to build its own data centers and AI chips. Every AI-linked listing brings audited numbers, and a piece of the private buildout, into public view, and eventually into databases like this one.

Below are some highlights from the report:

Revenues: CNNO revenues reached $101.4B in 2025, up 3.6% from 2024, a five-fold expansion from the ~$20B market of 2011. More telling than the annual figure is the trajectory within the year: growth ran below 1% YoY in 1H25, then jumped to +4.7% in 3Q25 and +8.5% in 4Q25. Both organic and inorganic drivers explain the acceleration. The organic driver is AI: data center revenues grew 11% in 2025, with QTS (+35%), ChinData (+27%), and VNET/21Vianet (+21%) posting the sharpest gains. The other driver is M&A: Uniti’s August 2025 absorption of Windstream single-handedly returned the bandwidth segment to growth (+7%). Towers, still the largest segment, slipped 1.2%. That’s partly a reporting artifact, as Crown Castle moved its fiber and small cells units to discontinued operations ahead of their $8.5B sale to EQT and Zayo (closed May 2026).

Five CNNOs generated over $5B in 2025 revenues: China Tower ($14.0B), American Tower ($10.6B), Equinix ($9.2B), Level 3 ($6.5B), and Digital Realty ($6.1B). Crown Castle, a ~$7B-revenue company two years ago, has left this club as it converges on a pure-play US tower model, while American Tower’s fastest-growing asset is its CoreSite data center unit (+14% in 2025). The sector’s center of gravity is visibly moving from towers to data centers.

Capex: CNNO capex hit $43.8B in 2025 (+11.3%), lifting capital intensity to 43%. Equinix used its xScale JV with GIC and CPP Investments to deliver record 2025 capacity (90+MW of xScale space, 23,250 retail cabinets); VNET (21Vianet) delivered a record 404MW of wholesale capacity against surging Chinese AI demand, with another 450-500MW planned within 12 months; PE-owned QTS spent an estimated $5.9B on capex, more than most CNNOs earn in revenue. Several operators are also investing in power infrastructure alongside new data center capacity to secure electricity for future AI deployments, extending the current investment cycle and delaying returns on capital.

Profitability: the sector’s average net margin jumped to 10.9% in 2025 from 3.0% in 2024. But this gain overstates reality, as merger accounting and other one-time items inflated 2025 net profit. Free cash flow margin, the more honest gauge, improved modestly to 6.9% from 6.3%, and held up despite the 4Q25 capex surge. Balance sheets, however, are re-leveraging: total debt rose 9.7% to $261.5B against $26.1B of cash, putting net debt near $235B. Asset sales remain the deleveraging tool of choice: Crown Castle is directing proceeds from its $8.5B fiber/small cells sale to a >$7B debt reduction and a $1B buyback, and more such divestitures are likely as interest rates stay elevated and CNNOs seek capital to pursue AI-related opportunities.

Employees: headcount rose 9% to about 120,600 in 2025, but this is consolidation, not hiring. Uniti’s merger with Windstream imported a telco-scale workforce into the sector. That also diluted the CNNO sector’s standout productivity metric: revenue per employee slipped to ~$840K in 2025 from ~$885K in 2024. Historical trends suggest this increase is temporary. CNNOs rationalize acquired workforces once integration is complete, so expect headcount to drift back down and productivity to recover over 2026-27.

Energy: energy intensity keeps climbing: the average CNNO consumed 879 MWh per $M of revenues in 2025, from 833 in 2024 and 555 in 2019. This tracks the data center segment’s rising share of sector revenues. The spread across the sector is extreme. DigitalBridge (4,371 MWh/$M, estimated), GDS (3,960), and QTS (3,575) sit at the top; tower specialists sit near the bottom. As AI workloads scale, energy access is becoming a competitive differentiator, and a key reason CNNOs and their PE backers are investing directly in power supply. They are also developing new fuel sources. Equinix, for instance, sees nuclear energy as a “promising solution” to power data centers, and is working with Oklo, Radiant, UCL-Energy and Stellaria.