Since the latest report of the market research company Dell’Oro Group, after three consecutive years of decline in global telecom capital expenditures from 2015 to 2018, preliminary data shows that the upward trend from 2019 has continued to the first half of 2020, calculated in US dollars, global telecommunications capital expenditures (total investment in wireless and wired telecommunications) have maintained steady growth. With the exchange rate unchanged, this part of expenditures has maintained growth at a mid-single-digit rate.
Stefan Pongratz, vice president and analyst of Dell’Oro Group, said: “At present, it seems that market confidence in infrastructure investment is improving, and the bottom is now over. We attribute the disconnect between the basic economy and capital expenditure growth to three key factors, including dependence on connectivity, the transition from 4G to 5G, and the nature and duration of this recession seem to be different from typical downturns.”
Other highlights of this three-year telecom capital expenditure forecast for September 2020 include:
- The telecommunications industry is not immune to the impact of the new crown epidemic, but in this recession, the negative impact of the slow deployment of the MBB market may not be as serious as the previous downturn;
- It is expected that global capital expenditure will grow at a compound annual growth rate of 2% during 2019-2022, and wireless capital expenditure will grow at a compound annual growth rate of 4%, which supports the forecast that the outlook is still optimistic;
- The limited revenue growth of operators will become one of the main obstacles to further accelerate telecom capital expenditures.
