“The forces that shape the capex cycle have not changed,” says Dell’Oro vp Stefan Pongratz, “operators can raise capital intensities over the short-term, but there is a reason the trend line has stayed flat over the past 10+ years. Since we are now operating at elevated ratios, capex acceleration remains a transitory phenomenon in a world where neither 4G nor 5G has been able to change the revenue trajectory.”

Global telecom capex is projected to decline at a 2% CAGR over the next three years, as positive growth in India and stable trends in Europe will not be enough to offset steeper capex deceleration in North America.

In the US, the transition towards steady-state conditions will weigh on wireless activity, leading to a 25 to 30% reduction over the next three years.

Given the highly unlikely prospect of a change in the current revenue trajectory and the expectation of flat operator top-line growth, capital intensity ratios are on track to approach 16% by 2025, slightly below the current trendline.