The global telecommunications sector witnessed a notable decline in capital expenditures (Capex) in 2024, reflecting a more cautious investment climate among operators despite persistent network demand.
According to MTN Consulting, which is tracking 140 telcos worldwide, total Capex for the annualized 4Q24 period stood at $295.4 billion — marking a 6.2 percent year-over-year (YoY) decline. This pullback signals a shift in strategic focus from aggressive infrastructure expansion to more measured, efficiency-driven investments.
In the fourth quarter alone, telco capex registered marginal growth of just 0.5 percent YoY to reach $85.2 billion, underscoring how spending momentum has largely plateaued after years of elevated 5G and fiber rollouts.
Diverging Operator Strategies
Capex performance varied widely across individual operators, highlighting diverging investment strategies:
India’s BSNL led global telcos in capex growth with a staggering 84.2 percent increase, reflecting India’s public sector push to modernize digital infrastructure.
Telstra (+36.1 percent), SoftBank (+13.4 percent), BT (+3.3 percent), and China Telecom (+2.5 percent) also expanded their capex footprints, signaling confidence in upgrading networks and investing in next-gen services.
Conversely, several major players scaled back significantly:
Reliance Jio reported a sharp 33.2 percent drop in capex, likely reflecting completion of its 5G rollout phase and a shift toward monetization.
Other steep declines came from KDDI (-19.9 percent), America Movil (-19.0 percent), China Unicom (-17.8 percent), and Airtel (-13.6 percent), suggesting increased capital discipline and possible delays in infrastructure deployment or project reprioritization.
Regional Capex Dynamics
Regionally, the Americas emerged as the top Capex spender, accounting for 36.1 percent of global telco capital outlay in 4Q24 — overtaking Asia in both absolute terms and capital commitment. However, Europe led in capital intensity, with Capex reaching 18.6 percent of revenues in the region, followed by the Middle East and Africa (MEA) at 16.8 percent. These metrics suggest European operators are continuing to invest heavily relative to their revenue base, likely driven by legacy infrastructure upgrades and regulatory mandates.
Capital Efficiency and Profit Margins
Despite reduced investment levels, operators managed to improve their capital efficiency slightly. Profitability margins rose modestly, with EBIT margins increasing to 15.3 percent and EBITDA margins touching 33.7 percent in annualized 4Q24. This indicates that cost optimization efforts and disciplined capex allocation may be supporting healthier financial fundamentals amid revenue stagnation.
Outlook
As the global telecom industry transitions from peak 5G deployment to service monetization and operational optimization, capex growth is expected to remain subdued in the near term. Operators are likely to prioritize digital platforms, AI-driven network automation, and cloud-native transformations — requiring less brute-force capex and more targeted innovation spending.
While large-scale capex surges may be behind, the focus now shifts to smarter capex, with an emphasis on ROI, network efficiency, and customer experience.
TelecomLead.com News Desk
