#United States #Redwood City #Dell'Oro Group #Telecom #Capital Expenditure

Understanding the Shifts in Global Telecom Capital Expenditure

The telecommunications industry is currently witnessing significant developments regarding capital expenditure (capex) trends. According to a recent report from Dell'Oro Group, renowned for its market analysis within the telecommunications sector, the global telecom capex is evolving towards stability rather than facing a drastic decline.

Key Findings from the Dell'Oro Group Report

Dell'Oro’s report highlights that after experiencing two consecutive years of reductions in capital expenditures, there was a notable stabilization observed in the second quarter of 2025 when compared to the same period in the previous year. This pattern aligns with the stabilization narrative that the firm has been emphasizing.

Stefan Pongratz, Vice President of RAN and Telecom Capex research at Dell'Oro Group, stated, “Capex is past the peak, but it is not falling off a cliff.” This indicates that while the capex might not reach the alarming highs of previous periods, it is equally untrue that it will plummet to drastically low levels in the near future.

Moreover, with the telecom industry's focus shifting from general coverage to enhancing capacity, quality, automation, and energy efficiency, there remains substantial room for improvement in capital intensity ratios. Post the peak capex-to-revenue ratios observed in 2022, there was a significant reduction in intensity throughout 2024. However, projections indicate that these ratios will stabilize in 2025, with a slight reduction expected thereafter.

Investment Outlook for 2025

Despite improved circumstances in the second quarter of 2025, the first half of the year exhibited a year-over-year capex decline, largely due to substantial decreases in the first quarter. Telecom investment conditions are anticipated to stabilize during 2025, although challenges relating to capex and telecommunications equipment revenue may persist. Furthermore, the report projects that the capex/revenue ratio will reach approximately 15 percent by 2029, dropping by three percentage points since its peak, reflecting an optimistic outlook on revenue as compared to capex.

Wireless capital intensity is also expected to adjust to levels between 12 to 13 percent by 2029, indicating a decline of five to six percentage points since the 5G rollout peak.

About the Report

Dell'Oro Group’s Telecom Capex Report provides an extensive analysis covering over 50 telecom operators, detailing their revenue streams, capital expenditures, and current trends in capital intensity. The report encompasses actual data as well as three-year forecasts categorized by individual carriers, regional specifications, and various technological frameworks, including wireless and wireline systems.

For further inquiries or details about this comprehensive report, interested parties can reach out via email for purchasing information.

Conclusion

In conclusion, while the global landscape for telecom capex has transitioned past previous peaks, forecasts suggest a stabilization that offers a more optimistic perspective than previously anticipated. As the telecommunications industry maneuvers through these adjustments, the focus on optimizing efficiency and reallocating resources will shape the future extension of capital expenditures in the years ahead.

About Dell'Oro Group

Dell'Oro Group is a specialized market research firm known for its strategic competitive analysis in telecom and data center infrastructure markets. With its in-depth quantitative data and qualitative insights, the company supports informed, fact-based decision-making in the industry.

For more information, visit Dell'Oro Group's website or contact them directly at their headquarters in Redwood City, California.