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EMEA Telecoms Carrier Capex Forecast

Capital expenditures of telecom service providers in the EMEA (Europe, Middle East, and Africa) region totaled 59.2 billion euros in 2006, up 7 percent from 2005, and are projected to increase 8 percent to 63.8 billion euros in 2010, according to Infonetics Research.

"Major incumbents and large service providers in the EMEA region have made it clear that capex will be allocated only to projects that have been identified as revenue growth engines, and all public service providers continue to keep an eye on cash flow," said Infonetics analyst Stephane Teral.

"Deutsche Telekom and France Telecom accounted for about a quarter of all EMEA carrier capex in 2006 -- a 2 billion euro increase over 2005. Both companies are coping with fierce competition in their home turf and have to invest in new broadband-based infrastructures and new types of services such as FMC to respond to the competition," Teral
added.

Overall, EMEA players acknowledge the tough competitive situation they are facing, but remain cautiously optimistic about potential single-digit growth to be generated by new bundles of multimedia services, including online gaming, the report shows.

The Infonetics report highlights include:

- Over the 5-year period from 2006 to 2010, EMEA service providers will spend a cumulative 309.6 billion euros on capital expenditures.

- The combined revenue of all public EMEA carriers (incumbents, competitors, wireless) is up 3 percent in 2006 to just over 400 billion euros.

- Of the capex going to telecom and datacom equipment, the top 3 investment areas for EMEA carriers in 2006 were voice, mobile RAN, and optical equipment.

- Many EMEA providers expect spending in 2007 will increase to sustain developments in 2 major growth areas: broadband wireless and wireline services.

- The number of broadband subscribers in the EMEA region will nearly double between 2006 and 2010.

- The number of mobile subscribers in EMEA is forecast to reach 1.4 billion in 2010.

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