Despite the uncertainty the COVID-19 coronavirus has caused, Dell’Oro Group remains somewhat optimistic about carrier spending. The market research firm says in its newly published Telecom Capex Report worldwide telecom capex, combining wireless and wireline network spending, should experience a 1% compound annual growth rate (CAGR) between 2019 and 2022.
Global capital intensity ratios – the ratio of capex to revenue – should increase at an identical rate during the forecast period, according to Dell’Oro. "While we are operating in unchartered territories and it is somewhat unorthodox to project solid capex growth in the middle of a pandemic, we envision that healthy end user fundamentals, positive 5G momentum, and an improved understanding about the importance of access to consistent broadband will ultimately outweigh the downside risks due to COVID-19," said Stefan Pongratz, vice president and analyst with the Dell'Oro Group.
Wireless, particularly 5G, will be the major area of investment, the market research firm predicts. Such spending in China will prove the strongest driver of capex increase, according to the report. In the U.S., wireless spending will focus on mid-band projects, increasing millimeter-wave investments, and some moderation in low-band projects.
The Telecom Capex Report covers the spending of more than 50 telecom operators, including carrier revenue, capital expenditure, and capital intensity trends. The report provides actual and three-year forecast details by carrier, by region, by country (United States, Canada, China, India, Japan, and South Korea), and by technology (wireless/wireline).
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