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Increased spending in the US and Chinese markets will drive an increase in global capex, according to the report
Capital expenditure in the global telecoms sector is projected to grow at a compound annual growth rate of 1 per cent per year between 2017 and 2020, according to a new report.
The new report, issued by Delloro, states that after two consecutive years of shrinking capex in the global telecoms sector, the industry will see a steady uptick in expenditure over the coming years, due in part to the network preparation necessary to roll out fifth generation mobile phone services (5G).
"We have adjusted our overall three-year capex expectations upward to reflect a more optimistic investment view than we had originally envisioned in both the US and Chinese markets," Stefan Pongratz, a senior analyst at Delloro, said in a blog post online.
The increase in global capex is being driven by increased spending in the US, as the country tries to position itself at the front of the queue for 5G deployment.
"After three consecutive years of declining capex and improving capital intensity trends in the US telecom market, we maintain the view that conditions are stabilising and that both capex and capital intensity will continue to trend upward. Aggregate US telecom investments are expected to grow at a high-single digit rate in 2018 and advance at a CAGR of two percent between 2017 and 2020," Pongratz added.
Pongratz pointed to investments made by US operator Sprint and corporate tax cuts in the US as key drivers for the upward trend in US capex.
