On Message

Historically, telecom companies have been known for their high capital expenditures—investing heavily in infrastructure, network expansions, and spectrum licenses. For decades,CapEx as a percentage of sales for mobile operators hovered between12% to 20%, driven by the need to deploy 4G, 5G, and fiber-optic networks. But things are changing. Today, we’re seeing a gradualdecline in CapEx ratios among many telecom players.However, companies likeGoogle, Microsoft, Amazon, and Meta are now reportingrecord-high CapEx spending, often exceeding 20% to 25% of sales in some cases, because AI, cloud computing, and data centers are driving massive infrastructure needs. What we’re seeing is arole reversal of sorts. The companies traditionally seen as “asset-light” are now investing heavily in physical infrastructure, while mobile operators, once synonymous with massive CapEx, are pulling back and focusing on squeezing more out of existing assets. As we move forward, success in this ecosystem won’t be defined by who spends the most—it will be defined by who spendsthe smartest.