Preliminary data from Dell’Oro Group points to a decline in global communications equipment spending for the full year 2023, due in part to lower 5G investment by operators.
The research firm noted that this is the first market contraction since 2017.
Dell’Oro Group said 5G-related capital intensity is on track to peak in 2022 and approach 15% by 2026, up from 18% in 2022.
Its pessimistic outlook predicts that global capital investment will decline at a mid-single-digit rate in 2024 and at a CAGR of -2% to 3% by 2026.
Vice President Stefan Pongratz said carriers’ capital-intensive budgets are fixed and capital spending is largely constrained by the trajectory of revenue, but “the revenue pie remains fixed.” said.
“Our analysis shows that carrier revenue growth will slow in 2023, remaining more or less stagnant over the past decade. And based on guidance, carriers will generally We are less optimistic that new opportunities from AI, edge computing, enterprise 5G, FWA, and 5G-Advanced will expand the pie.”
Pongratz said. mobile world live Wireless capital spending will decline at a low-single-digit rate in 2023, and “2024 is expected to remain challenging, with U.S. wireless capital spending projected to decline by nearly 15%.”
Telco revenues are expected to grow at a CAGR of 1% over the next three years.
.
