Worldwide telecom capex rose 5% year-over-year in the first half of 2026, Dell'Oro Group reported, beating expectations after several years of declining investment across the sector.

The strong half-year result did not change the analyst firm's long-term view. Dell'Oro still forecasts overall telecom capex growth of up to 1% CAGR through 2030, meaning operators are unlikely to return to the aggressive spending patterns of the 5G and fibre build-out era.

How did the equipment market respond?

Vendor revenue tracked capital spending almost one-for-one. Combined revenue across the six telecom equipment segments Dell'Oro monitors grew by about 5% over the same period. Those segments are:

• Broadband Access
• Microwave Transmission
• Optical Transport
• Mobile Core Network (MCN)
• Radio Access Network (RAN)
• High-End Router & Aggregation

The close correlation underlines how tightly equipment vendors remain tied to operator spending decisions, even as new customer groups emerge.

Why are operators spending again?

The recovery reflects a shift in how operators allocate budgets rather than a new investment cycle. Dell'Oro VP Stefan Pongratz explained that operators emerged from the 5G and fibre investment waves with greater capacity and are gradually redirecting spending from coverage towards capacity, modernisation, automation and efficiency.

"At the same time, improving operator revenues are helping to reduce capital intensity ratios even as network investments remain flat," Pongratz said.

That revenue improvement matters for the finance side of the story. Capital intensity — capex as a share of revenue — peaked at 18% in 2022 at the height of 5G rollout spending. Dell'Oro now expects it to decline to around 14% by 2028, before ticking up slightly as operators begin early investment in 6G.

What does this mean for vendors?

The equipment market holds a modest growth edge over operator spending over the forecast period. Dell'Oro projects telecom equipment revenue to grow at a 2% to 3% CAGR between 2025 and 2030, outpacing CSP capex growth.

The difference comes partly from incremental demand beyond the traditional carrier base. Cloud providers are adding to equipment demand, giving vendors a second customer pool as telco spending plateaus.

For equipment suppliers, the picture is one of stability rather than expansion: a 5% first-half rebound in 2026, followed by low-single-digit annual growth through the end of the decade. Operators, meanwhile, get breathing room to lift margins before the next generational investment cycle begins around the turn of the decade, when early 6G spending pushes capital intensity back up from its projected 14% low.