Skip to main content

Mobile and Video Apps Drive Service Provider Capex

Infonetics Research released its latest Service Provider report -- which analyzes telecom carrier capital expenditures (capex), operational expenses (opex), revenue per user, and subscriber trends by operator, operator type, region, and telecom equipment segment.

"Telecom capital expenditures are bottoming out at $289 billion this year, and our cycle-based forecast model and conversations with service providers indicate that a new investment cycle will start in 2011 and last several years, with capex growing to $321 billion in 2014 before growth slows again" says Stephane Teral, principal analyst for mobile and FMC infrastructure at Infonetics Research.

Overall, capital intensities will continue to slowly decline through at least 2014. because the world's telecommunications infrastructure is essentially built out.

Infonetics market study highlights include:

- From its peak in 2008, worldwide service provider capex declined 5.3 percent in 2009, and is on track to decline another 3 percent in 2010.

- The dip in capex in 2010 is due mainly to the fact that carriers in China, which invested heavily in network upgrades in 2009, have completed their 3G rollouts.

- Infonetics Research forecasts a 1.6 percent pickup in telecom carrier capex in 2011, marking the start of a new investment cycle.

- Despite the overall decline in service provider capex in 2010, some telecom equipment segments are faring well, including video infrastructure and IP routers/carrier Ethernet switches, which saw double-digit worldwide revenue increases in the first half of 2010.

- Infonetics expects the major areas of investment from 2011 to 2014 to be fiber-based wireline broadband (FTTx), 2G mobile network capacity expansion, network migration from 2G to 3G, and migration to LTE (mobile broadband will follow).

- Low equipment pricing resulting from fierce competition between western and Chinese vendors is giving service providers incentive to cap their capex budget and buy more equipment with lower budgets.

Popular posts from this blog

Growing Venture Capital in APAC AI Market

Technology is a compelling catalyst for economic growth across the globe.  Artificial intelligence (AI) rides a seismic wave of transformation in the Asia-Pacific (APAC) region — a market bolstered by bold government initiatives, swelling pools of capital, and vibrant tech ambition. The latest IDC analysis sheds light on this dynamic market. Despite a contraction in deal volumes through 2024, total AI venture funding surged to an impressive $15.4 billion — a signal of the region’s resilience and the maturation of its digital-native businesses (DNBs). Asia-Pacific AI Market Development The APAC AI sector’s funding story is not just about headline numbers but also about how and where investments are shifting. Even as the number of deals slowed, the aggregate value of investments climbed, reflecting a preference among investors for fewer but larger, high-potential bets on mature or highly scalable AI enterprises. The information technology sector led the AI investment charge. Top area...