COVID-19 Not Enough to Impact Telecom Capex According to Dell'Oro Group

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Sep 30, 2020, 08:00 ET

REDWOOD CITY, Calif., Sept. 30, 2020 /PRNewswire/ -- According to a recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, networks, and data center IT industries, following three years of declining telecom capex trends between 2015 and 2018 preliminary readings suggest that the upswing that began in 2019 extended into 1H2020 with worldwide telecom capex—the sum of wireless and wireline telecom investments—recording stable growth in nominal US Dollar terms and advancing at a mid-single-digit rate under constant currency conditions.

"We are still operating in unchartered territories but at this point, it appears that the market sentiment for infrastructure investments is improving and the nadir is now in the past," said Stefan Pongratz, Vice President and analyst with the Dell'Oro Group. "We attribute the disconnect between the underlying economy and aggregate capex developments to three key factors including the dependence on connectivity, the transition from 4G to 5G, and the fact that the nature and duration of this recession appear to be different than the typical downturn," continued Pongratz.

Additional highlights from the September 2020 3-year Telecom Capex Forecast:

The telecom industry is not immune to COVID-19 but the negative impact in slower to adopt MBB markets will likely not be as severe in this recession as in previous downturns.
Global capex growth for the 2019-2022 period is projected to improve at a CAGR of 2 percent, underpinning projections that the outlook remains favorable with wireless capex advancing at a 4 percent CAGR.
Constrained operator revenue growth is expected to be one of the primary inhibitors of further telco capex acceleration.

About the Report
The Dell'Oro Group Telecom Capex Report provides in-depth coverage of more than 50 telecom operators highlighting carrier revenue, capital expenditure, and capital intensity trends. The report provides actual and 3-year forecast details by carrier, by region by country (United States, Canada, China, India, Japan, and South Korea), and by technology (wireless/wireline). To purchase this report, please contact by email at [email protected].

About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, networks, and data center IT markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, please contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com.

SOURCE Dell'Oro Group