According to preliminary estimates from financial analysts at New Street Research, wireless capital expenditures of operators such as AT&T, Verizon, and T-Mobile may increase by approximately 7% due to the latest tariff policies of the Trump administration. In an analysis report submitted to investors after the tariff policy was announced, the agency pointed out that “about one-third of wireless capital expenditures are used for equipment procurement, with the majority of equipment coming from South Korea and Western Europe, which are currently subject to a tariff rate of 15% -25%. Assuming an average increase of 20% in equipment costs, with unchanged deployment progress and suppliers, it will lead to a 7% increase in the overall wireless capital expenditure budget.”
Analysts speculate that major telecommunications operators in the United States may have responded to potential tariff risks by hoarding equipment. If inventory is not established, operators may face a dilemma of increasing expenses or slowing down 5G deployment. The report suggests that “the three major operators in the United States are highly likely to maintain their existing capital budgets and adjust their network construction pace accordingly
Currently, Nokia, Ericsson, and Samsung are the main 5G equipment suppliers for US operators. Nokia is headquartered in Finland, Ericsson is in Sweden, and Samsung is from South Korea. According to the new tariff policy, EU countries are subject to a 20% tax rate, while South Korea is subject to a 25% tax rate.
The agency also calculated for fiber optic and wired network operators: the single point construction cost of fiber optic networks is expected to increase from $1200 to $1225, an increase of 2%; The capital expenditure for upgrading wired networks may increase by 9%.
It is worth noting that analysts believe that compared to the overall global economy, the impact on the US telecommunications industry is relatively controllable. The operator’s business may become a safe haven in market turbulence, with revenue and EBITDA expected to remain stable or slightly increase. Although rising equipment costs may threaten capital expenditures and free cash flow, operators are more likely to maintain their dividend and stock repurchase plans by adjusting their deployment pace. ”
Regarding the price trend of smartphones, the report predicts that tariffs will push up terminal costs. Operators may choose to pass on the costs to consumers, but considering the fierce market competition, they may also absorb the increased costs on their own.
Brian Hendricks, the policy director of Nokia in Washington, questioned the tariff policy: “This is not only a challenge, but also a poorly designed policy.” He revealed that under long-term pressure from the US, Nokia has focused on promoting supply chain diversification in recent years, but still needs to face new tariffs. What is even more puzzling is that if the policy goal is to attract the return of manufacturing industry, why should it be achieved by increasing the import cost of components (many of which have no production capacity in the United States)? How can this enhance the commercial feasibility of manufacturing in the United States?

Hendricks further pointed out, “As companies that continue to increase their investment in the United States, we deeply feel the uncertainty of the policy environment. Such policy fluctuations will seriously affect the confidence of business decision-making. When government intentions frequently conflict with market reality, companies will naturally adopt more cautious investment strategies.”
He summed up, “Once bitten by a snake, ten years afraid of a well rope.”