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North American Telecom Infrastructure Investment

The economic outlook for the North American market may be unpredictable, but that hasn't halted the planned telecom infrastructure investment. As an example, some mobile network operators are already preparing their networks for next generation 4G service deployment.

"North American mobile cellular capital expenditure is expected to hold its ground in 2012 year-on-year, with expenditure of around $10 billion," said Jake Saunders, VP for forecasting at ABI Research.

In 2013, mobile capital expenditure is likely to surge by 4.9 percent to $10.5 billion -- as North American telecom service providers continue upgrading their networks.

Signs of these network infrastructure investment plans include:

In 2Q-2012, Verizon Wireless announced it had discontinued investment in the expansion and capacity enhancement of its 3G network as the operator has allocated those resources to building out its 4G LTE coverage.

On a year-on-year basis, capital expenditure should trend flat or slightly down. The operator is confident its 4G footprint will at least be equal to its 3G footprint by mid-2013.

T-Mobile USA announced that it will invest $4 billion in 2012 and 2013 to strengthen its 4G network, including the planned launch of LTE in 2013. Expenditures in 1Q-2012 were essentially neutral in 1Q-2012 due in part to these network modernization efforts.

AT&T is still spending substantially on wireline upgrades, but in 1Q-2012, wireless telecoms took 54 percent of its total CAPEX, up by $454 million YoY to $2.3 billion.

Sprint's wireless network upgrades -- to support 4G LTE -- are helping to drive up its capital expenditure commitments to $710 million in 1Q-2012, that's up by 58 percent YoY.

Some of the renewed commitment by the incumbents could be partially explained by Clearwire's activities. They had started off as a WiMAX 4G operator but has seized the LTE-TDD opportunity to introduce mobile broadband services.

The first phase of LTE overlay network build-up saw the installation of 8,000 sites in hot zones within urban centers -- as part of the company's strategy to provide capacity offload services to other operators. Clearwire expects CAPEX in 2012 will amount to $350 to 400 million.

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