“While we are operating in uncharted territory and it is unorthodox to project solid capital growth amid a pandemic, we envision healthy end-user fundamentals, the positive momentum of 5G, and a better understanding of the importance of consistent broadband access ultimately outweighing the downside risks due to COVID-19,” says Stefan Pongratz, Vice President and Analyst at Dell’Oro Group.
Additional highlights from the March 2020 Telecom 3-Year Capex Forecast:
Wireless capital expenditure is expected to grow at a faster pace than fixed capital expenditure, supporting projections that 5G capital expenditure will accelerate rapidly over the forecast period.
Worldwide capital intensity ratios—wireless plus wired—are expected to advance at a compound annual growth rate of 1 percent between 2019 and 2022, driven primarily by a healthy increase in wireless revenue/capex.
Wireless investments in China, driven by the rapid shift from 4G to 5G, are expected to drive the bulk of capital expenditure over the 2019-2022 forecast period.
Following three years of elevated investment levels in the US telecom market, wireless investments will be characterized by robust mid-band capital expenditure, increased millimeter wave investments, and some moderation in low-band projects.
