Hardware & Networking_ Carrier Capex Tracker_ Recovery On Track, Albeit Slightly Softer, for Telcos; Cable MSO Capex Better than Expected But Mixed Trends By Customer. Thu Feb 13 2025

Summary of the Conference Call Industry Overview - Industry: Telecommunications and Cable/Broadband Operators - Companies Covered: AT&T, Verizon, T-Mobile, Comcast, Charter, Lumen Key Points and Arguments 1. Capex Growth for US Telecom Service Providers: - Aggregate capex for US Telecom Service Providers increased by 22% year-over-year (y/y) to $14.3 billion** in **4Q24**. This growth is driving FY24 capex to **$ 48.0 billion, which is better than expected, despite being a -8% y/y decline compared to FY23 [2][3] 2. 2025 Capex Projections: - For 2025, aggregate capex is projected to grow by 3% y/y to $49.5 billion**, slightly lower than previous estimates. T-Mobile is expected to increase capex by **8% y/y**, Verizon by **5% y/y**, while AT&T is expected to remain flat [3][4] 3. **Cable and Broadband Operators Performance**: - Aggregate capex for cable and broadband operators rose by **14% y/y** in **4Q24**, exceeding expectations. FY24 capex is now estimated at **$ 22.8 billion, a 1% y/y increase. For 2025, capex is expected to rise by 7% y/y to $24.4 billion [4][8] 4. Mixed Trends Among Cable Operators: - While Lumen and Charter are expected to increase spending y/y, Comcast is projected to have flat to declining capex [4][8] 5. Equipment Suppliers Outlook: - Equipment suppliers are anticipated to experience stronger rebounds compared to the overall capex recovery in 2025, due to easier comparisons from inventory digestion challenges faced in 2024 [2][4] Additional Important Insights 1. Capex Tracker Updates: - The capex tracker has been updated based on recent earnings reports from major telecom and cable operators, indicating a pull-forward in capital investments from 1Q25 into 4Q24 [2][3] 2. Historical Capex Trends: - Historical data shows fluctuations in capex for US Telcos, with a notable decline in 2023 followed by a recovery trajectory in 2024 and 2025 [8][12] 3. Analyst Contact Information: - Analysts involved in the report include Samik Chatterjee, Joseph Cardoso, Priyanka Thapa, and Manmohanpreet Singh, with their contact details provided for further inquiries [5][14] 4. Investment Considerations: - Investors are advised to consider the mixed trends in spending among different operators and the overall recovery in the telecom sector when making investment decisions [2][4] This summary encapsulates the key insights from the conference call, focusing on the performance and projections of the telecommunications and cable industries, along with specific company forecasts and trends.