Dell’Oro: Global Telecommunications Capital Expenditure Remains Challenging in 2024

According to a recent report released by Dell’Oro Group, preliminary data shows that after several years of good development, the growth of global telecommunications capital expenditure (the total investment of wireless and wired telecommunications operators) slowed down in the first half of 2023. This slowdown is not surprising, as it reflects the expected decline, especially in investments related to wireless, and is consistent with the performance of the telecommunications equipment market. Looking ahead, it is expected that the environment in 2024 will remain challenging until it stabilizes in 2025. By 2025, global telecommunications capital expenditure is expected to decrease by 7% compared to 2022.

The factors that determine the capital expenditure cycle have not changed, “said Stefan Pongratz, Vice President of Dell’Oro Group.
Other highlights in the report:
1. The overall prospects of the telecommunications industry have remained basically unchanged. Over the next three years, global telecommunications capital expenditure is expected to decline at a compound annual growth rate of 2%, as positive growth in India and stable trends in Europe will not be sufficient to offset the sharp deceleration of capital expenditure in North America.
2. In the United States, the transition to the steady-state-conditions will put pressure on the wireless sector, resulting in a 25% to 30% reduction in capital expenditure over the next three years.

3. Considering that the current revenue trajectory is unlikely to change and the expectation of flat revenue growth for operators, the Capital intensity ratios will approach 16% by 2025, slightly below the current trend line.