Worldwide Telecom Capital Levels Increased Rapidly in 1H19

  • Dell'Oro Group

REDWOOD CITY, CA —  Worldwide telecom capital intensity levels increased at a rapid pace in the first half of 2019, reflecting stable currency adjusted revenue growth in combination with healthy capex growth, resulting in a 6 percent increase year-over-year or nearly a 1 percentage point increase in worldwide telecom capex/revenue. This is according to the Telecom Capex Report from Dell'Oro Group, a provider of market information about the telecommunications, networks, and data center IT industries.

"With constrained operator revenue growth being a significant inhibitor of sustained capex acceleration, the pickup in 1H19 capital intensity levels underpinned projections that operators are comfortable with some deviation in the short-term to accommodate the rollout of 5G," said Stefan Pongratz, analyst and vice president with the Dell'Oro Group. "At the same time, after six consecutive years of low-single digit revenue growth, operators are not interested to return to historical capex/revenue ratios," continued Pongratz.

Additional highlights from the 1H 2019 Telecom Capex Report:

  • Worldwide capital intensity ratios – wireless plus wireline – are projected to advance at a 1 percent CAGR between 2018 and 2021, driven primarily by a healthy uptick in wireless capex/revenue.
  • Wireless investments in the Asia Pacific region, propelled by the rapid shift from 4G to 5G, are projected to drive the lion share of the capex upside over the 2018 to 2021 forecast period.
  • After two consecutive years of capex expansion in the U.S, the full year 2019 outlook remains favorable but the investment envelope beyond 2019 will likely be more subdued, partly due to mid-band spectrum delays.


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