How Much U.S. Mobile Operator Capex Spending?

How much do U.S. mobile operators spend each year on capital investment? It depends on what we count. 

Definitions and assumptions always matter when evaluating such matters as mobile industry capital investment. Among the most consequential matters is whether money spent to acquire spectrum licenses is counted as “capex” or not. 

We might use standard accounting rules or industry conventions, but we need to know which definition is being used, as it makes a big difference.

Consider a new CTIA report on U.S. mobile industry capital investment. Between 2016 and 2020, for example, “capex” is said to range from $25 billion to $30 billion per year. 

source: CTIA

Spending for spectrum licenses ranges is tracked separately, it appears, at least in part because, historically, spectrum license spending has been highly variable. Prior to 1994, spectrum license spending might have been tracked by decade. Between 1994 and 2001 CTIA uses an eight-year interval. Since 2002 CTIA uses a five-year interval. 

That indicates a quickening of the tempo of license acquisitions; more competition for licenses as well as bigger spectrum allotments (more frequent auctions; more licensees; more capacity per auction). 

source: CTIA 

It appears CTIA, for purposes of tracking capital investment, does not include spectrum purchases in its chart on U.S. mobile industry “capital investment.” CTIA shows cumulative “capex” between 2016 and 2020 as a cumulative $138.5 billion total. 

CTIA also shows spectrum licenses paid for in the 2017 to 2021 period as $116 billion. So obviously, spectrum license spending, though “capex” for accounting purposes, is separated from spending on spectrum licenses, which also is categorized as “capex” by accountants. 

Standard and Poors includes spectrum licenses in the “capex” category, for example.  

So actual mobile capex often is portrayed as higher or lower, depending on the assumptions. “Network capex” often is separately portrayed from “spectrum capex.” Both have grown. 

CTIA also says cumulative capex including 2001 to 2020 is $601 billion, an average of about $30 billion per year. That tends to correlate to separate tracking of network capex and spectrum license capex. At the same time, cumulative spectrum license fees are said to represent a cumulative $200 billion in spending.