In 1Q25, US telecom operators continued a trend of sharply reducing capital expenditures (capex), as they prioritize monetizing past infrastructure investments over launching new buildouts, MTN Consulting said. Industry leaders such as AT&T, Verizon, Comcast, Charter, T-Mobile, Lumen, and Frontier are navigating a complex environment marked by economic uncertainty, inflationary pressures, and a politically driven trade climate.
The US telecom market ended 2024 with $80.5 billion in Capex and $505.2 billion in revenues. Capital intensity dropped to 15.9 percent in 2024, down from the 17–18 percent range seen in 2022–23, and is expected to fall further in 2025. The capex pullback reflects a strategic shift toward cost discipline, improved ROI, and cautious spending amid weaker revenue growth and rising operational costs.
According to 5G Americas, North America has reached 205 million 5G connections, representing 29% of all wireless connections. The evolution toward 5G-Advanced is marked by greater network openness, as outlined in 3GPP standards. These advancements include improved speeds, latency, energy efficiency, and enhanced support for non-terrestrial networks, multi-vendor RAN models, and programmable APIs.
AI focus
This openness fosters more intelligent, AI- and ML-optimized networks that can support emerging generative AI applications and address future security demands, including those from quantum computing. As the industry moves toward 6G, 5G Americas is intensifying its focus on promoting technological progress, particularly in North America, and advocating for a sustainable long-term spectrum pipeline to support a diverse and growing 5G ecosystem — including satellites, MVNOs, IoT, and AI-driven services.
While telcos have largely missed out on the investor excitement surrounding generative AI and the data center boom, they are increasingly using AI to boost internal efficiency and reduce operating expenses (Opex). Rather than building new AI services for consumers, telcos are embedding AI in core operations to automate workflows, cut labor costs, and streamline support functions, MTN Consulting said. Key examples include:
AT&T is deploying AI in call centers, software development, and digital customer acquisition. Automation efforts are driving down labor costs and boosting self-service adoption.
Verizon integrates AI across customer care and network operations, using predictive maintenance and automated service tools to enhance efficiency.
Comcast leverages AI in billing automation, network troubleshooting, and churn prediction, resulting in fewer truck rolls and reduced support costs.
Charter has a long-standing focus on AI to enable self-service and improve frontline efficiency. The company uses internal tools to support agents and cut repair visits.
T-Mobile/Deutsche Telekom utilizes AI for cost reduction across its group operations, targeting €800 million in savings by 2027. Applications include chatbot-based customer service, router management, and fiber rollout optimization.
Lumen is aligning itself with the AI economy as a digital backbone, using AI for real-time network management and automation via its Lumen Digital platform.
In the months ahead, US telcos are expected to remain conservative on capex as they face rising labor costs, possible supply chain disruptions from tariffs, and softening demand due to reduced foreign investment and visitor activity. Despite these pressures, AI offers a vital path forward — helping telcos do more with less while preserving service quality and operational resilience.
Baburajan Kizhakedath