Dell’Oro: Telecom Capex Rebounds 5% in 1H26

Worldwide telecom capital expenditures increased approximately 5% year-over-year in the first half of 2026, according to Dell’Oro Group, marking a stronger-than-expected rebound after several years of declining carrier investment. The result represents a notable change from the research firm’s outlook earlier this year, when Dell’Oro projected worldwide telecom capex would decline 2% for full-year 2026. The firm cautions, however, that the first-half improvement does not fundamentally alter its longer-term view of a mature carrier investment environment.

The composition of operator spending is also changing. Following major 5G and fiber coverage investment cycles, Dell’Oro sees carrier priorities moving increasingly toward network capacity, modernization, automation and efficiency rather than broad coverage expansion. Aggregate manufacturer revenue across the telecom equipment markets tracked by Dell’Oro also increased approximately 5% year-over-year during the first half. Those markets span Broadband Access, Microwave and Optical Transport, Mobile Core Network, Radio Access Network, and High End Routing and Aggregation.

Dell’Oro now projects worldwide telecom capex will grow at only a 0% to 1% compound annual growth rate between 2025 and 2030. Capital intensity, which peaked at 18% in 2022, is projected to fall to approximately 14% by 2028 before beginning to increase modestly as early 6G investment emerges. Telecom equipment revenue could perform somewhat better than overall carrier capex, with Dell’Oro forecasting 2% to 3% annual growth through 2030, partly because cloud providers are becoming an incremental source of demand for infrastructure traditionally associated with telecom networks.

Investment Shift — From coverage toward capacity, modernization, automation and efficiency

Capital Intensity — Projected around 14% in 2028, versus 18% peak in 2022

Equipment Outlook — 2%–3% CAGR through 2030, partly supported by cloud-provider demand

“The first half was stronger than we expected, but the improving near-term trajectory does not materially change the longer-term capex story,” said Stefan Pongratz, Vice President at Dell’Oro Group.

The first-half result is significant because it runs ahead of Dell’Oro’s expectations entering 2026 without yet signaling the start of another broad carrier spending cycle. In April, Converge Digest reported Dell’Oro’s forecast for a 2% decline in worldwide telecom capex during 2026 after essentially flat spending in 2025. The new data therefore shows considerably stronger near-term investment than anticipated.

The more important structural signal may be where that money is going. Dell’Oro’s transition from “coverage” to “capacity” describes a different investment phase from the initial 5G and fiber buildouts. Rather than maximizing geographic footprint, operators are increasingly directing capital toward extracting more capacity and efficiency from deployed networks, modernizing transport and core infrastructure, and introducing greater automation.

There is also an increasingly important distinction between telecom operator capex and the addressable telecom equipment market. Dell’Oro expects equipment revenue to grow faster than carrier capex through 2030 partly because cloud providers are purchasing infrastructure in categories traditionally associated with service-provider networks. The result is a networking equipment market increasingly influenced by two investment cycles — relatively mature carrier spending and rapidly expanding cloud and AI infrastructure.

APRIL 2, 2026 · RESEARCH Dell’Oro: Worldwide Telecom Capex to Decline in 2026 The earlier forecast projected a 2% decline in 2026 telecom capex.

MAY 19, 2026 · OPTICAL Dell’Oro: Optical Transport Market to Surge 16% in 2026 on AI Data Center Demand

JUNE 10, 2026 · RESEARCH Dell’Oro: AI Infrastructure Spending Pushes 2026 Data Center Capex Above $1 Trillion

AUGUST 21, 2026 · OPTICAL Dell’Oro: DCI Drives 15% Optical Transport Growth

SEPTEMBER 10, 2026 · RESEARCH Dell’Oro: High-End Routing Market Jumps 25%

🌐 We’re tracking telecom infrastructure, carrier investment, optical transport, routing, RAN and the network modernization cycle at Converge Digest.