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Hello,
Thanks for your interest in our latest research. You can view a summary of our latest report below.
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Global economies have recovered from the worst of last year’s pandemic, but COVID-19 has caused some long-term shifts in market dynamics. Network traffic growth rates have accelerated, new business models emerged, cloud services matured and spread to new verticals, applications and customer sizes. Networks are more important than ever. Revenue growth rates and profitability in all three segments that we track – telco, webscale, and carrier-neutral – have been stronger in recent quarters than anticipated. Network investments have grown, at sometimes stunning rates. Total network operator capex, across the three segments, is likely to total US$520 billion (B) in 2021, up 13.4% from 2020. Much of this year’s growth came from webscale, which will end 2021 at about 32.1% of total capex, from 29.3% in 2020. But telco and carrier-neutral capex have also spiked.
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Looking ahead to 2026, capex growth rates will slow considerably but total capex is likely to reach $629B by 2026. In that year, telco, webscale, and carrier-neutral segments will account for roughly 51%, 40%, and 9% of capex, respectively. Networks will increasingly revolve around data centers, which will continue to proliferate both at the core and edge. Data center innovation will continue to be rapid, as webscalers push the envelope on network design and function, and telcos seek cheaper ways of running their networks. The telco need for cost efficiency will rise as overhyped 5G-based opportunities fail to materialize in any big way. Carrier-neutral operators (CNNOs) will remain important to telcos and webscalers, and benefit from an ongoing wave of new capital which will help them transform to more integrated providers of “digital infrastructure” assets....
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Best regards,
Matt Walker
Chief Analyst
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