US telecom and cable/broadband carrier capital expenditure Report Interpretation

Overview

This J.P. Morgan carrier-capex tracker updates forecasts after 2Q26 results from AT&T, T-Mobile, Verizon, Charter and Comcast. It finds that near-term network investment remains supported by fiber build-outs, convergence strategies and service-quality upgrades, while the longer-term outlook is more cautious because cable-sector spending is expected to decline materially.

Core views

The report updates US carrier-capex forecasts following 2Q26 earnings. Aggregate capex by AT&T, T-Mobile and Verizon rose 13% year on year to $12.8 billion, modestly above J.P. Morgan's $12.7 billion expectation. The three operators reaffirmed their full-year plans, leading J.P. Morgan to forecast FY26 aggregate telecom capex of $49.7 billion, up 2% year on year and slightly below its prior $50.0 billion estimate. The firm now expects 3Q26 aggregate telecom capex of about $12.6 billion, up 3% year on year, versus its prior forecast of $12.8 billion and 5% growth. AT&T is expected to spend $23.0-$24.0 billion in 2026, T-Mobile about $10 billion, and Verizon $16.0-$16.5 billion; J.P. Morgan's FY26 growth estimates are -3% for AT&T, -2% for T-Mobile and +7% for Verizon. Fiber expansion remains a key driver of telecom spending. AT&T is becoming more aggressive in pursuing fiber market share and is prioritizing combined fiber-and-wireless economics, or convergence, even as Fiber ARPU was flat year on year excluding Lumen. AT&T and Verizon reiterated intentions to scale fiber footprints rapidly. T-Mobile did not set a fiber-passings target and instead stressed return on investment, indicating that it does not intend to build solely for convergence or scale. Verizon's more than $1 billion Google dark-fiber contract, together with expected additional multibillion-dollar deals over coming years, is presented as evidence of demand for long-haul and metro fiber and for data-center interconnect. Verizon is also focused on cost reductions; its reiterated 2026 guidance represents about a $4 billion year-on-year capex reduction when Frontier is included in the 2025 comparison. Cable and broadband operators also delivered a stronger-than-expected quarter. Charter and Comcast's aggregate capex rose 8% year on year to about $5.2 billion in 2Q26, above J.P. Morgan's $4.9 billion expectation. J.P. Morgan left its 3Q26 forecast unchanged at $5.1 billion, down 2% year on year, and forecasts FY26 aggregate cable capex of $20.0 billion, down 1% year on year. Charter maintained approximately $11.4 billion of FY26 capex guidance, down 2% year on year, while Comcast had previously indicated that 2026 capex should be similar to 2025; J.P. Morgan models Comcast at $8.8 billion, up 1%. Competitive conditions and network requirements support the near-term cable outlook. Comcast reported increasing promotional intensity in certain markets, describing some competition as irrational. It observed downstream broadband traffic up 10% year on year and upstream traffic up 25%, with AI queries contributing to traffic growth. Comcast argues that an active HFC network, while less economical to operate, may offer advantages over passive fiber in an AI-driven environment. Charter's outlook for competitive fiber overbuilds was largely unchanged, with typical growth in overbuild activity and no structural shift in promotional intensity. J.P. Morgan therefore expects cable operators to retain investment priorities around competition and upgrades needed to deliver high service levels, creating scope for 2026 capex upside as occurred in 2025. The report nevertheless distinguishes cyclical near-term support from a durable structural increase in spending. It notes that Charter is targeting less than $8 billion of capex in 2028, versus roughly $11.5 billion annually currently. Its forecasts show aggregate cable-operator capex falling from $20.2 billion in 2026 to $18.1 billion in 2027 and $16.8 billion in 2028, led by Charter declining to $9.5 billion and then $8.1 billion. In contrast, aggregate US telecom capex is modeled broadly stable at $49.6 billion in 2027 and $50.2 billion in 2028. J.P. Morgan concludes that broadband and telecom network spending is robust for now, but its longer-term drivers are likely to remain cyclical, with limited visibility into a secular increase.

Analysis framework

J.P. Morgan combines reported quarterly capex, management guidance and its Telecom Services team forecasts for AT&T, T-Mobile, Verizon, Charter and Comcast. It compares reported spending with pre-earnings expectations, updates quarterly and annual forecasts through 2028, and links the spending outlook to fiber deployment, convergence economics, competitive intensity, traffic demand and planned network upgrades.

Methodology notes

• Industry AnalysisSupply-demand framework

  Carrier capex tracking based on operator results, guidance, fiber expansion, traffic demand and network-upgrade needs.

  The report uses demand indicators and competitive/network requirements alongside company guidance to explain the level and direction of telecom and cable infrastructure spending.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Fiber footprint expansion and data-center interconnect demand as drivers of network investment.

  The report connects end-demand for connectivity and AI-related traffic to carrier fiber deployment and capex needs.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AT&T

  Telecom operator expanding its fiber footprint and pursuing convergence economics.

  Strengths

  More aggressive pursuit of fiber market share; combined fiber-and-wireless revenue focus.

  Weaknesses

  Fiber ARPU was flat year on year excluding Lumen as broadband revenue is sacrificed for convergence.

  Comparison

  FY26 capex guidance of $23.0-$24.0 billion; J.P. Morgan forecasts capex down 3% year on year.

• Verizon

  Telecom operator investing in fiber while pursuing cost reductions.

  Strengths

  More than $1 billion Google dark-fiber contract supports the case for long-haul, metro-fiber and data-center-interconnect demand.

  Comparison

  FY26 capex guidance of $16.0-$16.5 billion; J.P. Morgan forecasts capex up 7% year on year.

  Risks

  Its guidance implies about a $4 billion year-on-year capex reduction when Frontier is included in the 2025 comparison.

• T-Mobile

  Telecom operator emphasizing return on investment in its fiber strategy.

  Strengths

  Focuses on ROI rather than fiber build-out for convergence or scale alone.

  Weaknesses

  Does not provide a fiber-passings target.

  Comparison

  FY26 capex guidance of about $10 billion; J.P. Morgan forecasts capex down 2% year on year.

• Comcast

  Cable and broadband operator upgrading network capabilities amid rising traffic and competition.

  Strengths

  Reported strong traffic growth and sees potential advantages for active HFC networks in an AI-driven environment.

  Weaknesses

  Faces increasing promotional intensity in some markets.

  Comparison

  J.P. Morgan models FY26 capex of $8.8 billion, up 1% year on year.

  Risks

  Competitive promotional activity may pressure broadband economics.

• Charter

  Cable operator facing fiber-overbuild competition while planning a lower medium-term capex base.

  Strengths

  Maintained FY26 capex guidance despite competitive conditions.

  Weaknesses

  Long-term capex is expected to decline substantially.

  Comparison

  FY26 capex guidance is about $11.4 billion; J.P. Morgan forecasts $9.5 billion for 2027 and $8.1 billion for 2028.

  Risks

  Its target of below $8 billion of capex in 2028 weighs on the longer-term cable-spending outlook.

Key data

• US telecom capex, 2Q26$12.8 billionUp 13% year on year; modestly above J.P. Morgan's $12.7 billion expectation.
• US telecom capex, FY26E$49.7 billionUp 2% year on year; prior estimate was $50.0 billion.
• US cable and broadband capex, 2Q26~$5.2 billionUp 8% year on year; above J.P. Morgan's $4.9 billion expectation.
• US cable and broadband capex, FY26E$20.0 billionDown 1% year on year.
• Charter FY26 capex guidance~$11.4 billionDown 2% year on year.
• Charter 2028 capex target<$8 billionCompared with roughly $11.5 billion annually currently.
• Comcast broadband trafficDownstream +10% y/y; upstream +25% y/yComcast attributed part of the traffic growth to AI queries.

Impact & implications

The report indicates that fiber expansion, convergence and cable network upgrades should sustain near-term infrastructure spending, with cable operators potentially delivering higher-than-expected 2026 capex. However, the projected decline in Charter spending makes the cable sector's medium-term capex trajectory weaker than the broadly stable telecom outlook.

Risks

• Long-term network spending may remain cyclical rather than shift into a sustained secular growth phase.
• Charter's planned reduction to below $8 billion of capex in 2028 could weigh on aggregate cable-sector spending.
• Competitive fiber overbuilds and promotional activity can pressure cable broadband pricing and economics.

What to watch

• Whether AT&T and Verizon continue to accelerate fiber footprint expansion and convergence strategies.
• Follow-through on Verizon's Google dark-fiber contract and expected additional fiber deals.
• Cable operators' 2026 capex delivery relative to guidance and J.P. Morgan's expectation for upside surprises.
• Broadband traffic growth, AI-related usage and the resulting need for HFC and other network upgrades.
• Charter's progress toward its stated 2028 capex target.