• Telcos are spending less of their revenues on capex
• The number of LEO satellites in orbit is set to skyrocket 
• UScellular is laying off 4,100 staff, but many might be rehired

In today’s industry news roundup: Telco capex budgets are set to fall, as is capital intensity, according to Dell’Oro Group; you might struggle to see the stars by 2032, according to ABI Research; UScellular is laying off a lot of retail store staff ahead of the company’s sale to T-Mobile US, but many of those affected are set to be rehired; and much more!

Ahead of the first-quarter earnings releases come gloomy prognostications from research house Dell’Oro Group. Its 2025 Telecom Capex report finds that worldwide telecoms capital expenditure (capex) fell by a significant 8% last year. As if that wasn’t bad enough news for the global vendor community, telco budgets are set to be squeezed even further this year and into the near future. According to the Dell’Oro team, worldwide telco capex is set to decline at an average of 2% for the next three years. During the same period, telco revenues are set to increase slightly and, as a result, the global average “capex intensity” (the percentage of revenues apportioned to capex budgets) is set to shrink from 16% in 2024 to around 14% in 2027. Given the febrile state of the global economy and the wild daily swings in tariff rates and import/export policy in the US as President Trump continues to reveal more and more of his economic genius to a mesmerised world, a 2% drop in telco capex intensity may not seem like much but it is and will be of enormous concern to an equipment vendor community already facing a downturn that started in 2024 as telcos began to complete their big fibre access network and 5G infrastructure projects. Stefan Pongratz, VP of RAN and telecom capex research at Dell’Oro, said that with carriers’ revenues showing only moderate growth at best, they are making the strategic decision to balance growth with efficiency. In essence, that means they won’t be spending as much as they used to. Pongratz added that “different risk profiles across the carrier spectrum become more pronounced. While some operators prefer a more growth-oriented approach and consider elevated capital intensity levels as essential to gain a competitive edge and be better prepared for the next technology transition, the majority of the operators believe the pie is mostly fixed, and focusing on efficiency improvements is considered less risky to this group.” 

Get out of my orbital slot or I’ll flex my thrusters – it’s getting crowded up here! According to ABI Research, the total number of active low-earth orbit (LEO) and very low-earth orbit (VLEO) satellites in operational orbit will reach about 42,600 by 2032, a massive leap from the 7,473 that were in orbit at the end of 2023. As the geopolitical climate worsens and relations between the US and China deteriorate further, national and commercial satellite technologies and systems are being ramped-up as more companies, such as SpaceX’s Starlink, Amazon’s Project Kuiper, AST SpaceMobile and more, enter the market, competition intensifies and partnerships are forged in the race to expand satellite services across many industry verticals. Commenting on the developments, Rachel Kong, research analyst at ABI Research, stated in this press release: “As we observe more competitors innovating their technologies and upgrading their satellite constellations to stay ahead in the space race, we anticipate a surge in commercial investment in satellite services and applications, including IoT, remote sensing and global satellite communications. Additionally, advancements in real-time data processing and analysis, coupled with growing competition in value-added services such as AI and edge processing, will spur increased applications in the Earth observation industry. These factors are expected to drive significant growth in the LEO satellite market in the coming decade.” LEO satellites operate at altitudes between 160km and 2,000km above the Earth’s surface, offering lower latency than is possible from geostationary (GEO) satellites. That reduced latency makes them more suitable for services such as satellite broadband, IoT, earth observation and defence systems. The US and China are at loggerheads and their governmental, private and startup LEO satellite sectors are regarded as increasingly important strategic assets with would-be backers keen to invest in them. Companies such as the China Satellite Network Group, Shanghai Landspace Technology and Spacesail are speeding development of their satellite constellations to strengthen national defence and security systems and make no secret of their ambition to become global leaders in comms and other key space capabilities. As Rachel Kong says, “To capitalise on the growing opportunity in the satellite market, it is essential for ecosystem players to recognise the potential in emerging markets, such as Asia-Pacific, South-east Asia, and Africa. These regions offer vast untapped opportunities, though a lack of investment and regulatory barriers currently limits them. Moving forward, it will be crucial to collaborate with local governments and ecosystem players to align regulatory policies, expand broadband access, and strengthen digital infrastructure.” The LEO gold rush is just beginning.

UScellular, the operator that is in the process of being acquired for $4.4bn by T-Mobile US, is to lay off 4,100 staff in June, ahead of the completion of the acquisition deal. However, according to a letter sent by UScellular to the US government, a majority of the impacted staff, most of whom work in retail outlets, are set to be rehired by T-Mobile US. UScellular says it has “made arrangements with T-Mobile to offer employment to a majority of those employees at a salary or wage rate and with benefits that, when taken as a whole, are no less favorable to these employees’ current salary or wage rate and benefits”. The M&A deal, whereby T-Mobile US will acquire all of UScellular’s networks, operations, customers and 30% of its licensed spectrum, is set to be completed in mid-2025.

In another boost for quantum innovation and AI, China Telecom and the Hong Kong University of Science and Technology (HKUST) have signed a strategic partnership agreement under which both organisations will establish an Artificial Intelligence Innovation Laboratory and a Quantum Innovation Joint Laboratory. The agreement is part of an ongoing programme to improve research collaboration between Chinese industry and academia with the intent to “drive cutting-edge technological advancements” and facilitate the commercialisation of successful research projects. The partnership will also introduce a joint talent development programme to “cultivate a high-calibre talent pipeline”. HKUST is globally recognised research facility and its contribution to AI ranks it in first place across the Greater China region following the establishment of the Hong Kong Generative AI Research and Development Center (HKGAI) in late 2023. The centre focuses on advancing foundational large models, developing vertical AI applications, and exploring AI governance frameworks. State-owned China Telecom, which ended 2024 with 424 million mobile and 197 million fixed broadband customers, is currently focused on innovation in AI, cloud computing, computing power networks, cybersecurity, and quantum technology. Building on the framework of the “one joint management committee plus two major laboratories plus one talent programme” system, the new strategic partnership will “establish a comprehensive innovation ecosystem spanning basic research, technological breakthroughs, commercial applications, and ecosystem development”. The Quantum Innovation Joint Laboratory will engage in joint research on quantum computing and targeted application scenarios, while ”developing interdisciplinary curriculum frameworks to foster cross-domain expertise”. Furthermore, both parent organisations will jointly run a “series of talent development initiatives, including a summer elite internship programme, high-level talent workstations, academic exchange programmes, and advanced training certifications” to “further strengthen the digital technology talent pool in the Guangdong-Hong Kong-Macao Greater Bay Area.” Some indication of the importance of the announcement can be gained from the fact that the signing ceremony was attended by both Mr. Ke Ruiwen, the chairman and CEO of China Telecom, and Professor Nancy Ip, the president of HKUST.

– The staff, TelecomTV