Telecoms investment pivots from 5G buildouts to fiber and AI
After a multi-year 5G splurge, telecoms investment is normalizing as operators chase returns, push fiber deeper, and tap cloud and AI for efficiency. Public funding and policy—from the U.S. BEAD program to Europe’s Gigabit Infrastructure Act—are reshaping where capital flows next.
Telecoms investment enters a new chapter
In the Telecoms sector, Telecom operators are moving from peak buildouts to disciplined allocation, marking a new phase in the sector’s investment cycle. After heavy 5G radio deployments and spectrum outlays in the late 2010s and early 2020s, carriers are increasingly targeting software-driven capacity upgrades, fiber densification, and monetization of existing assets. The capex-to-sales ratios that swelled during the 5G rush are easing across mature markets as boards push for better return on invested capital and stronger free cash flow.
Industry observers note that capital is gravitating toward projects with clearer payback—enterprise services, fixed broadband, and network automation—rather than blanket coverage expansions. Operators in the U.S. and Europe have guided capex lower for 2024–2025 as major coverage milestones are met, while Asian incumbents continue densification at a measured pace. The long-range outlook still anticipates heavy spending on next-gen core upgrades and fiber, with more than half of global mobile connections expected to be on 5G by 2030, according to GSMA’s Mobile Economy research.
5G spending pivots from coverage to cash flow
The initial 5G cycle was defined by macro-radio rollouts, spectrum auctions, and device adoption. That phase is giving way to investments in standalone (SA) core networks, network slicing, and edge capabilities designed to unlock enterprise revenue. While consumer ARPU uplift has been modest, operators are prioritizing industrial use cases, private 5G, and ultra-reliable low-latency services to improve returns from earlier outlays.
On the demand side, 5G connections continue to scale—well beyond a billion subscriptions—and are forecast to account for the majority of mobile traffic later this decade. Momentum has shifted to optimizing capacity and energy use, with selective site densification and software features replacing the broad-brush coverage spending of recent years. These trends are reflected in updated traffic and subscription projections in the latest Ericsson Mobility Report, which tracks the evolution from buildout to monetization across regions.