Dell’Oro Group’s recently published “March 2024 Telecom Capex report” indicates that telecom operators are scaling back investments in 5G, which the group says is consistent with the aggregate telco equipment slump.
The report reveals a decline in global telecom CapEx for the full year of 2023—the first contraction since 2017—and forecasts a worldwide CapEx decline at a mid-single-digit rate in 2024. The report also shows that, over the next three years, global carrier revenues are expected to increase at a 1 percent CAGR.
Stefan Pongratz, Dell’Oro Group vice president and analyst, said in a press release, “The fundamental challenges have not changed. Operators have a fixed capital intensity budget, and CapEx is largely constrained by the revenue trajectory. What is complicating the situation is that the revenue pie remains fixed. Following some positive developments amidst the peak of the COVID-19 pandemic, our analysis shows that operator revenue growth slowed in 2023 and has more or less remained stagnant over the past decade. And based on the guidance, operators, in general, are not overly optimistic that emerging opportunities with generative AI, edge computing, enterprise 5G, FWA, and 5G-Advanced will expand the pie.”
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