The world's 50 largest network operators combined for annual revenue and investments of more than $1.4 trillion in 2018, according to a new report from Dell’Oro Group. The firm estimates that the group of 50 carriers comprise about 80% of worldwide capex and revenue in the telecom sector.

On the heels of three consecutive years of declining capex in telecom, Dell’Oro predicts capex growth will outpace revenue during the next three years as 5G deployments proliferate. Growth in telecom capex is expected to taper off after 2021, according to the firm’s projections.

“While the relationship between capex [and revenue] will likely remain strong over time and constrained operator revenue growth will be one of the primary inhibitors of further telecom capex acceleration, we remain optimistic that there will be some deviation in the short-term to accommodate the rollout of 5G,” Stefan Pongratz, senior director at Dell’Oro Group, wrote in a prepared statement.

“With the preliminary 5G capex guidance coming in stronger than expected, there is a lot of excitement right now about the potential 5G capex ramp,” he explained.

Dell’Oro Group estimates that worldwide wireless and wireline telecom revenues were flat or increased less than 1% year-over-year on a currency adjusted basis during 2018. The firm also noted that based on its initial estimates for 2018, revenue and capex were both slightly weaker than anticipated.

Global telecom capex is expected to grow at a 1% compound annual growth rate (CAGR) through 2021, and revenues are projected to be flat through the next three years. In other words, 5G is not expected to positively impact operator revenues in the near term.

Dell'Oro pins the bulk of capex growth to rising investments in the U.S. market, which grew at a “mid-single digit rate” during 2018. Telecom capex growth in Europe increased 1% year-over-year on a currency-adjusted basis, according to the firm.

Meanwhile, the firm expected capex in China to decline 6% in 2018, but telecom investments were weaker than expected, declining around 8% during the year.

Subsequently, a report from IDTechEx Research reinforces that finding and expects it to continue through 2019. The three major network operators in China have released capex plans for 2019, and their total combined 5G-related capex is now estimated to be a little more than $5 billion, compared to previous estimates of at least $7.4 billion. 5G capex was also expected to surpass $37 billion in China in 2020, but those projections may be readjusted as well, according to the firm.

Dell’Oro Group also noted that operators shifted focus from fixed capex to wireless capex in 2018, with wireless investments gaining about 2% of the mix. The shift was “driven by improved market conditions in the [radio access network] market and reduced demand for core, routers, and switches,” the firm noted in the report.