As telcos across the world alter their Capex spending, does it signal a permanent shift, reflecting broader strategic transformation amidst new challenges?
That is a running joke in the tech industry. And the maxim has held true. The shifts from mainframes to clients, from huge IT departments to outsourcing, from on-premise to Cloud—these pivots have been possible only because something is ‘detachable’, if not exactly ‘throw-able’.
Incidentally, as telcos enter stormy waters or set sail for new horizons, their heavy ships are also bringing a lot of iron and piling them on the deck. From towers being outsourced to the move towards small cell sites to a thinner Capex purse—a lot of iron is slowly being slipped away from the deck, silently finding its way out of the ship. Maybe it is a manoeuvre to make the ship light enough to swim in tough patches? Maybe it is just spring cleaning to make way for a new kind of metal? Or maybe it is just a ‘wait and watch’ interlude? So why is the Capex going down, and is it from the Starboard side or the Port one?
CAPPEX DIPS, TELCO FLIPS
A glance at some guidance and announcements in the telco corridors hints at the new graph Capex is taking here. When Verizon shared its capital expenditures for 2024, it etched a downward slope, showing a substantial reduction from USD 23.1 billion in 2022 to USD 18.8 billion in 2023 to about USD 17.0 billion and USD 17.5 billion in 2024.
This story is from the May 2024 edition of Voice and Data.
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This story is from the May 2024 edition of Voice and Data.
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