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Will global telecom spending experience a mid-single-digit decline in 2024?
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Author : JIUZHOU
Update time : 2024-04-12 11:00:59
Market research companies report that global telecom capital expenditures will decline in 2023 as operators reduce 5G investment. Experts expect the global telecommunications spending environment to be more severe in 2024.
A market research group's recent report shows that telecom companies worldwide are cutting back on investments in 5G technology. This means they are spending less money on developing 5G networks.
The report suggests that the companies are scaling back their plans for expanding and upgrading their 5G capabilities. Researchers are observing this trend across different regions in the world. This means they are spending less money on developing and implementing 5G networks.
The report indicates a trend of decreased financial support for 5G technology among telecom companies around the world. This shift in investment priorities could impact the rollout and availability of 5G services in the future.
Preliminary findings show that in nominal US dollars:
Throughout 2023, global telecommunications capital expenditures declined. This is the first contraction since 2017.
Overall capital spending has decreased. This decrease aligns with a decline in the total telecoms equipment market. A market research firm reported the decline across six segments.
Market Research Group Vice President and Analyst stated:
"The fundamental challenge has not changed."
"Operators maintain fixed capital intensity budgets and revenue performance largely constrains capital expenditures."
"The situation becomes more complex as the income distribution remains unchanged."
"Our examination shows that operator revenue growth increased during the peak of the COVID-19 pandemic. However, experts expect it to slow down in 2023. Analysts project that the growth will remain relatively unchanged compared to the past ten years."
"Operators are not exceedingly optimistic about the potential growth from emerging opportunities. These opportunities include generative artificial intelligence, edge computing, enterprise 5G, FWA, and 5G-Advanced."
Other highlights from the March 2024 Telecom Capital Expenditure Report:
1. Experts expect global operator revenue to grow at a compound annual growth rate of 1% in the next three years.
2. Analysts expect that the market environment will remain challenging in 2024. Experts now expect global telecom capital spending to decline by mid-single digits this year. The decline will be at a CAGR of negative 2% to negative 3% over the period to 2026.
3. The ratio of wireless to wireline capital expenditures remains essentially unchanged. This reflects the continuing challenges facing the wireless industry. U.S. wireless-related capital spending will decline at a double-digit rate through 2024.
4. The capital intensity ratio in the 5G era will peak in 2022. Experts expect it to decrease to about 15% by 2026, a drop from 18% in 2022.
A market research group's recent report shows that telecom companies worldwide are cutting back on investments in 5G technology. This means they are spending less money on developing 5G networks.
The report suggests that the companies are scaling back their plans for expanding and upgrading their 5G capabilities. Researchers are observing this trend across different regions in the world. This means they are spending less money on developing and implementing 5G networks.
The report indicates a trend of decreased financial support for 5G technology among telecom companies around the world. This shift in investment priorities could impact the rollout and availability of 5G services in the future.
Preliminary findings show that in nominal US dollars:
Throughout 2023, global telecommunications capital expenditures declined. This is the first contraction since 2017.
Overall capital spending has decreased. This decrease aligns with a decline in the total telecoms equipment market. A market research firm reported the decline across six segments.
Market Research Group Vice President and Analyst stated:
"The fundamental challenge has not changed."
"Operators maintain fixed capital intensity budgets and revenue performance largely constrains capital expenditures."
"The situation becomes more complex as the income distribution remains unchanged."
"Our examination shows that operator revenue growth increased during the peak of the COVID-19 pandemic. However, experts expect it to slow down in 2023. Analysts project that the growth will remain relatively unchanged compared to the past ten years."
"Operators are not exceedingly optimistic about the potential growth from emerging opportunities. These opportunities include generative artificial intelligence, edge computing, enterprise 5G, FWA, and 5G-Advanced."
Other highlights from the March 2024 Telecom Capital Expenditure Report:
1. Experts expect global operator revenue to grow at a compound annual growth rate of 1% in the next three years.
2. Analysts expect that the market environment will remain challenging in 2024. Experts now expect global telecom capital spending to decline by mid-single digits this year. The decline will be at a CAGR of negative 2% to negative 3% over the period to 2026.
3. The ratio of wireless to wireline capital expenditures remains essentially unchanged. This reflects the continuing challenges facing the wireless industry. U.S. wireless-related capital spending will decline at a double-digit rate through 2024.
4. The capital intensity ratio in the 5G era will peak in 2022. Experts expect it to decrease to about 15% by 2026, a drop from 18% in 2022.
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