"We're expecting a telecommunications capex hike in 2012, as operators around the world ramp their spending like crazy to launch LTE networks, modernize their mobile networks, and carry out national wireline broadband initiatives, said Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
According to the Infonetics assessment, network operators must invest in their networks or they'll suffer the consequences -- after all, worldwide competition for telecom leadership is very intense. And, this twenty-first century infrastructure is a key lever for sustained national prosperity and growth.
What's driving the latest round of network construction and enhancements? High demand everywhere for telecom services, particularly mobile broadband, is fueling the latest investment cycle.
The key capex contributors in 2012 will be Clearwire, Sprint, and T-Mobile USA in the United States; NTT DoCoMo and Softbank Mobile in Japan; and KT, LGU+, and SK Telecom in South Korea. Moreover, some nations have a more cohesive telecom investment strategy.
China recently revealed a $58 billion economic stimulus package to fund yet another round of investment in telecom infrastructure. They're taking the opportunity -- during the current global economic downturn -- to invest strategically now, and thereby position the nation for a leadership role in the global networked economy.
Meanwhile, Europe's Big 5 service providers have increased capital intensity by 2 percentage points for the first time in 5 years -- right in the middle of their regional economic downturn.
As for Latin America, operators already have led a huge investment burst, with capex there up 25 percent in 2011, led by America Movil and Telefonica.
Other highlights from the market study include:
- Global telecom carrier capex grew 3 percent to $301 billion in 2011 from 2010.
- Spending on every type of network equipment grew in 2011, with the exception of TDM voice, which continued its steep decline.
- Asia Pacific was again the largest telecom carrier capex region, followed by EMEA (Europe, Middle East, Africa).
- Infonetics expects worldwide capex to spike in 2012, then level out in 2015 and 2016 at around the $345 billion mark.
- Wireless operators' share of capex is forecast to grow from a quarter to nearly a third of global capex between 2012 and 2016, as the world continues to go mobile.
- Telecom service provider revenue grew 6 percent, to $1.8 trillion worldwide, in 2011 over 2010.
- Operators in Asia Pacific and EMEA are the largest revenue producers -- with each region generating about a third of the overall global revenue.