Verizon and other telcos could start spending less on 5G networks, but that's not a sign of trouble

Unless you're reckless or your pockets run really deep, I'm sure you've already made some adjustments to your personal budget. Telcos will do the same, as 2026 will be a "challenging year", experts say.

Verizon is said to be cutting its CapEx from $17 billion (in 2025) to ~$16 billion (in 2026).

Spending less

The Dell'Oro Group market research company forecasts an overall 2% decline in telecom CapEx.

CapEx (which stands for capital expenditures) is the upfront, large investments in assets. There's a thing called OpEx, too, and it's about ongoing costs to keep the business running (like salaries, maintenance or electricity bills).

In the case of telcos, CapEx translates to building cell towers and network infrastructure, laying fiber-optic cables and/or upgrading equipment to support their 5G networks.

But why spend less?

One could assume that if Verizon and other companies are forecasted to lower their CapEx, they're somehow afraid of investing in future growth. But that's not the case.

They'll just spend on other parts of their business.

"It will be a challenging year for telecom suppliers, especially for those with a wireless-focused tilt", says Stefan Pongratz, Dell'Oro Group VP for Fierce Network.

While AI-RAN expenditures are already happening, "both the optical transport and high-end router markets" are expected to grow this year.

Telcos are likely to reduce spending on 5G networks, but experts anticipate they will increase spending on metro and core networks. That's because of the data center traffic increase, which demands better optical transport and faster routers.

The difference

The investments in 5G could soon drop more than they did when we were midway with the 4G rollout.

That's because mobile data traffic "is not growing as quickly" with 5G like it did in the 4G era.

We should be safe

While Verizon and other telcos might cut back on 5G spending, the shift is not a sign of trouble. It's more of a sign that we've entered the mature phase of network investment, where the biggest 5G upgrades have already been completed.