The broadband industry generated close to record-breaking capital expenditure (capex) investment in communications infrastructure in 2023, according to a new report from USTelecom–The Broadband Association. Investment was propelled by intense consumer demand within a powerfully competitive marketplace.
Broadband providers collectively put $94.7 billion into U.S. communications infrastructure last year, working on a range of activities to bring high-speed networks to all types of communities. The expenditure is the second highest industry capex in 22 years, the “2023 Broadband Capex Report” stated.
Capex funds are those used by organizations acquire, upgrade and maintain physical assets. Annual capex investment involves complex decisions based on long-term strategy, macroeconomic conditions, and other factors, the report explained. One factor is that because broadband prices trail overall inflation, high-speed broadband is one of the most cost-effective consumer services, which spurs demand.
Investment activities among broadband providers in 2023 included “expansion of fiber deployments, integration of fiber and mobile networks, increased rural broadband construction, and network capacity additions to keep pace with advances in artificial intelligence and other applications that are fueling rising bandwidth demands among consumers and across the economy,” the report said.
Decades of investment in “world-class networks and connectivity infrastructure” have amounted to almost $2.2 trillion since 1996. The USTelecom report stated the $94.7 billion annual broadband capex figure is conservative.
In order to prepare an aggregate figure, the report collects capital expenditures data for major wireline, wireless and cable broadband providers, but not from smaller wireline broadband providers, electric cooperatives, or satellite broadband providers — which it estimates at no less than $2 billion — due to the difficulty of obtaining consistent and comparable data, according to the report.
Telecompetitor reported on a different forecast in 2023, which stated that investment in fiber-to-the-home from 2023 to 2027 would total approximately $135 billion, significantly less than the annual broadband capex investment found in USTelecom’s report.
