S&P Global expects mobile operators to boost capital investment levels as new 5G networks are built. Some acceleration of capex to build a next-generation network is not unusual. The issue is whether this is less cyclical, and more permanent an issue.
The companion issue is financial return from such capex. Mobile operators are going to be challenged to earn returns on the higher capex, S&P Global notes. The long standing issue is that although customer data consumption climbs as much as 50 percent a year, forcing networks to invest, revenue earned from providing those services is relatively flat. Buyers are not going to pay twice as much for twice as much speed, for example.
Also, average revenue per account or user is dropping globally, while global revenue growth is flat, and is projected to have zero to one-percent growth for the foreseeable future.
All that makes higher capital investment an issue.
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