For the past decade, the telecom industry has been in a buildout cycle. Carriers spent heavily to expand coverage, upgrade networks, and roll out 5G. Now, that cycle is slowing down.
Ericsson recently reported a 10% year-over-year drop in sales, with North America showing particular weakness. Carriers are pulling back on capital expenditures, and the vendors that depend on that spending are feeling it.
In simple terms: the industry is pulling back on how much it spends to build network infrastructure.
But demand for connectivity has not slowed down. If anything, it’s becoming harder to serve the places it’s needed most, like dense indoor environments and high-traffic venues like airports and arenas.
The Old Economic Model Doesn’t Work
For years, the assumption was that new demand would restart the build cycle. Generative AI was supposed to bring on a new surge in data demand. But the reality is that generative AI traffic is roughly one sixteen-hundredth of what the network carries on any given day.
So where’s the growth opportunity? It’s shifting toward specific, high-value use cases, for enterprise, indoor coverage, and mission-critical connectivity.
The AWS Moment for Telecom
When a business cost becomes too expensive, it gets outsourced. It’s happened before, in the case of cloud infrastructure, and Amazon Web Services (AWS).
The question facing the telco industry today is how to serve the locations where the demand is high, but it is not profitable or reasonable to build out a new tower.
The good news: a more capital efficient model already exists.
Helium at the Center of the Shift
Coverage is already getting more built-out, more efficiently,through the people-powered Hotspots on the Helium Network.
Today, the Helium Network serves nearly 3.5 million people daily across the United States. Individuals and businesses deploy small, low-cost Hotspots in homes, storefronts, offices, and public spaces. These nodes extend real wireless coverage in places traditional infrastructure often skips.
When subscribers from major carriers connect through that coverage, data flows across the network just like it would anywhere else. But instead of requiring a new capex cycle, that coverage is already in place.
What makes the model sustainable is the incentive structure underneath it.
HNT is the native token and fuel behind the Network. As real traffic flows across the Network, the people building coverage earn HNT.
That creates a flywheel: demand drives usage, usage funds expansion, and coverage grows where it’s actually needed.
This complements existing infrastructure rather than replacing it. Carriers focus on the coverage they can still economically justify, and communities fill the rest.
The Rebalancing
The capex pullback is a reckoning for how connectivity gets delivered. Carriers are already telling the market, in earnings calls and capex guidance, that the old model can’t sustain itself, even as demand for connectivity keeps growing.
Dell’Oro’s Stefan Pongratz has put it plainly: the operators best positioned to scale back capex are the ones not investing heavily beyond their known use cases. The traditional model will not fund the gap it’s facing.
So while the rest of the industry looks for its next funding model, the one already meeting this demand and carrying millions of users every day is Helium.
