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Rising Rates, Rethinking Routes: The Future of Telecom Infrastructure Investment in a High-Interest World

In light of the global trend of central banks adopting a ‘higher for longer’ interest rate policy, how will telecom companies adjust their investment strategies in response to the increased cost of capital? What implications will rising borrowing rates have for the future of telecom infrastructure investment? Phillip Colmar, Global Macro Strategist at MRB Partners,…

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By Phillip Colmar · Phillip ColmarRising Interest RatesTelecom IndustryThe Macro Research Board
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Key takeaways

01

In light of the global trend of central banks adopting a ‘higher for longer’ interest rate policy, how will telecom companies adjust their investment strategies in response to the increased cost of capital?

02

What implications will rising borrowing rates have for the future of telecom infrastructure investment?

03

Phillip Colmar, Global Macro Strategist at MRB Partners,…

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In light of the global trend of central banks adopting a ‘higher for longer’ interest rate policy, how will telecom companies adjust their investment strategies in response to the increased cost of capital? What implications will rising borrowing rates have for the future of telecom infrastructure investment?

Phillip Colmar, Global Macro Strategist at MRB Partners, highlighted telco companies’ financial challenges in the current economic climate. Colmar, an experienced strategist and economist specializing in global multi-asset investment strategies, underscored the necessity of a strategic shift to adapt to the evolving economic landscape and its effects on telecom infrastructure development.

“It is true that those telco companies that have been spending on this infrastructure and a reliance on funding to pay for it are now gonna face much higher borrowing rates,” he said.

Article written by MarketScale.

Video TranscriptExpand ↓

Callbar from MRB partners here. It is true that those telco companies that have been spending on this infrastructure and a reliance on funding to pay for it are now gonna face much higher borrowing rates. Other words, their debt servicing costs are gonna rise. This is likely to compel them to rethink or at least slow down some of the investment. In other words, the net present value of these projects just as in what it once was when we started this and the cost of capital was near free. That being said, telcos have already been suggesting that they would reduce their CapEx after what's been a period of pretty heavy investments and heavy spending to build out their five g networks in recent years. So looking ahead, we are expecting some slowdown in this sector and investments in this area.

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About the author

Phillip Colmar
Phillip ColmarGlobal Macro Strategist & Managing Partner

Phillip Colmar has 20+ years of experience, both as a strategist and economist. He focuses on global multi-asset investment strategy, trading opportunities, and financial market risks. His expertise is in identifying and developing macro and investment themes. He has a proven track record of idea generation and outperforming the markets. Over his career, Colmar has covered all major global asset classes and has developed comprehensive frameworks, models, and indicators. Prior to forming MRB, he was the Head of both the Daily Insights and Global Fixed Income Strategy services at BCA Research Inc. Colmar has an M.Sc in Finance from Queen’s University, as well as a B.A. in Economics and a Bachelor of Business Administration (Finance) from Bishop’s University.

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About the Expert

Phillip Colmar
Phillip Colmar

Global Macro Strategist & Managing Partner

Phillip Colmar has 20+ years of experience, both as a strategist and economist. He focuses on global multi-asset investment strategy, trading opportunities, and financial market risks. His expertise is in identifying and developing macro and investment themes. He has a proven track record of idea generation and outperforming the markets. Over his career, Colmar has covered all major global asset classes and has developed comprehensive frameworks, models, and indicators. Prior to forming MRB, he was the Head of both the Daily Insights and Global Fixed Income Strategy services at BCA Research Inc. Colmar has an M.Sc in Finance from Queen’s University, as well as a B.A. in Economics and a Bachelor of Business Administration (Finance) from Bishop’s University.

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