Mobile infrastructure capex has declined significantly since the second quarter of 2023, following a wave of spending on 5G, with no recovery yet in sight (see here and here). While the mobile industry has faced such declines in the past, signs suggest that the current weakness could be longer and deeper than previous downturns. The top five reasons that could turn the current spending cycle into a long-term bear market for mobile infrastructure are:
- Declining Mobile Traffic Growth: Reduced growth in mobile traffic eases the pressure for network upgrades.
- Network Disaggregation: Operators can selectively upgrade parts of the network, extending the lifecycle of existing equipment.
- Completed Investments in Physical Infrastructure: Major investments in physical infrastructure are largely completed, leaving spending focused on incremental expansion.
- Delayed 6G Deployments: 6G is not expected to become commercial with meaningful deployments for at least six more years.
- Financial Pressures: Many operators face financial constraints that preclude large capex spending.
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