Wireless capital expenditures in North America poised to plunge 10-20 percent in 2023

Telecom carriers and analysts have been talking about lower capital expenditures (capex) for 2023, so it’s no surprise that Dell'Oro Group released a report citing a decline in worldwide telecom spending in 2023. Dell'Oro states that the decline is going to continue for a while. Global telecommunications capex is projected to decline at a 2% to 3% compound annual growth rate (CAGR) over the next three years, as positive growth in India will not be enough to offset sharp capex cuts in North America. For wireless, the market research firm is now modeling capex in the North America region to decline from 10% to 20% in 2023. Part of that has to do with the state of 5G rollouts. With the upper mid-band spectrum available nearly nationwide, operators are in a better position to scale back investments. More spectrum in the nation’s pipeline and wider bandwidths will be critical to justify another major capex cycle; spectrum efficiency gains alone likely will deliver minimal improvements. Capex and base station deployment are not tightly correlated, but in this case, the drop in capex will align with a roughly 10% drop in high-power base station deployment in North America.