According to a recently published report from Dell’Oro Group, telecom operators are now scaling back their investments in 5G and fixed broadband technologies. Preliminary findings show that the more challenging conditions that shaped the second half of 2023 extended into the first half of 2024. Worldwide telecom capex, the sum of wireless and wireline/other telecom carrier investments, declined 10 percent year-over-year in the first half of 2024, partly due to built-up inventory, weaker demand in China, India and U.S., challenging 5G comparisons, excess capacity and elevated uncertainty.

“The high-level message is clear. The flattish revenue trajectory and the difficulties with monetizing new technologies and opportunities are impacting the risk appetite and willingness to raise the capital intensity levels for extended periods,” said Stefan Pongratz, vice president for RAN and Telecom Capex research at Dell’Oro Group. “In addition, the reduced gap between advanced and less advanced regions, when it comes to adopting new technologies, is impacting the investment intensity on the way up and down,” continued Pongratz.

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Additional highlights from the September 2024 Telecom Capex report:

  • Global carrier revenues are expected to increase at a 1 percent CAGR over the next 3 years.
  • Worldwide telecom capex is projected to decline at a mid-single-digit rate in 2024 and at a negative 2 percent CAGR by 2026.
  • The mix between wireless and wireline remains largely unchanged, reflecting challenging times still ahead for wireless. Wireless-related capex will decline at a 3 percent CAGR by 2026.
  • Capital intensity ratios are modeled to approach 15 percent by 2026, down from 17 percent in 2023.

About the Report

The Dell’Oro Group Telecom Capex Report provides in-depth coverage of around 50 telecom operators, highlighting carrier revenue, capital expenditure and capital intensity trends.   The report provides actual and three-year forecast details by carrier, by region by country (U.S., Canada, China, India, Japan, and South Korea), and by technology (wireless/wireline).