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Global operator capex will to return to growth this year after two consecutive years of decline, research firm Dell’Oro predicts.
The company is expecting a compound annual growth rate of 1% in constant currency terms between 2017 and 2020. This is an improvement on the company’s previous forecast for the period.
The more optimistic projection is largely due to signs of improvement in both the US and Chinese markets, Dell’Oro carrier economics lead Stefan Pongratz said in a blog post.
But total capex spend in China [Figure 1] is still expected to decline year-on-year in 2018 and stay flat in 2019 before returning to growth in 2020.
Pongratz noted that constrained operator revenue growth is expected to be one of the primary inhibitors of further capex acceleration that could be expected with the introduction of 5G.
Currency adjusted operator revenues are projected to remain flat between 2017 and 2020, with operators expected to struggle to find new revenue streams to offset slower smartphone revenue growth.
Likewise, while the IoT has long-term revenue generation possibilities, there is expected to be limited benefit over the next few years. Dell’Oro estimates that carrier IoT revenues will account for just 2% of total mobile revenues by 2020. This could be even lower if current pricing trends prevail.
