Network operator capex ends 2023 at $543B, down 3% YoY; webscalers guiding up, telcos moderating GenAI fervor pushing data center capex higher for webscale and CNNO, while telcos look for cost reductions; progress could help ease fears of excessive hype

Network operator capex ends 2023 at $543B, down 3% YoY; webscalers guiding up, telcos moderating GenAI fervor pushing data center capex higher for webscale and CNNO, while telcos look for cost reductions; progress could help ease fears of excessive hype

This note summarizes 2023 capex results for each of three segments of network operators tracked by MTN Consulting: telco, webscale, and carrier-neutral. The note also discusses capex-related news from early 2024, and presents an informal update to our December 2023 spending forecast. That forecast projects capex in 2024, by segment, to amount to: $309 billion (B) for telco (2023 actual: $315B), $203B for webscale (2023: $192B), and $39B for carrier-neutral (2023: $35B). That would total to $552B, just 1.6% growth above the 2023 actual. While we continue to expect telco spending to be tightly controlled in 2024, the generative AI (GenAI) hype will push webscale & carrier-neutral capex higher than expected by at least another $10-20 billion. Telco capex in 2024, though, is likely to come in about $10-20B less than anticipated last year, roughly offsetting the webscale/CNNO outperformance. We will provide a formal update to our spending forecast within the next 3 months.