The US telco landscape – with industry titans such as AT&T and Verizon – experiences a capex downcycle, driven by both macroeconomic factors and evolving investment priorities. After an all-time high fueled by extensive 5G and fiber deployments, telcos have pivoted to efficiency, cost preservation, and infrastructure monetization.
Thus, US telco capex reached $80.5 billion in 2024, but the 2025 estimate marks a further downward trend, with residual inflation fears, potential recession, and overall economic uncertainty in mind. This follows a steep increase in capital intensity – measured as the capex to revenue ratio – from 17-18% in 2022-23 to 15.9% in 2024 and below.
For industry leaders AT&T and Verizon, this reflects different strategic reshuffles: AT&T sees relatively flat capex, as existing FTTH buildouts continue, while Verizon expects a moderate increase in 2025 capex, largely due to FTTH passings, following years of extensive cuts.
Both companies, as well as other major industry players such as Comcast and T-Mobile, are also utilizing Artificial Intelligence for enhanced operational productivity, including call center automation, predictive maintenance, and network optimization, to offset labor and drive self-service.
For equipment vendors, this translates to a grind on a slowing treadmill, as the data center market attracts increasingly more investor attention, juxtaposed with public debt and tariff-stressed weaker economic growth, looming receivables, component cost increases, and labor costs.
And while the US telco market is set to continue driving overall revenues growth thanks to broadband and other related leaps, the capex perspective remains subdued, with 2025 marked by infrastructure monetization and careful expansion.
