The turmoil of 2020 is expected to advance rather than disrupt the cable industry's newly established trend of declining capital expenditures with a 6.0% annual drop that sets the course for the five-year outlook. According to Kagan estimates for total cable capex, spending by U.S. operators is on track to slide to less than $16.9 billion in 2020. Reduced need for video-supporting set-top boxes is the largest contributor to the decline amid household belt-tightening and shifting viewing patterns. The impacts of the global pandemic could be seen in other reporting categories, most notably the outsized drop in the support segment.

Operators continue to invest through the roiling economic picture, including lifting scalable infrastructure, or SI, spending for increased bandwidth. Though operators are servicing a reduced number of residential subscriptions across the traditional triple play, declining penetration rates have not significantly crimped footprint expansion represented in line extension capex.

The five-year outlook points to reduced overall levels with a saw-toothed trajectory impacted by our expectations for an investment ramp in DOCSIS 4.0 upgrades in the back half of the five-year outlook.

We model industry spending will drop to nearly $16.2 billion by 2024, producing a negative 2.0% CAGR from 2019 to 2024. It is an acceleration from the comparable five-year historical period, which produced a 0.6% CAGR amid the shifting investment patterns from 2014 to 2019.