Posted by: Andy Huckridge | June 19, 2012

Infonetics Predicts Uptick in Telco CAPEX

Infonetics Predicts Uptick in Telco CAPEX

Stéphane Téral

Stéphane Téral Principal Analyst
Mobile Infrastructure and Carrier Economics
stephane@infonetics.com +1 408.583.3371

Infonetics is predicting an uptick in telecom CAPEX this year driven by mobile network modernization, especially in Asia. Some highlights:

  • Global telecom carrier capex grew 3% 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 US$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% to $1.8 trillion worldwide in 2011 over 2010
  • Operators in Asia Pacific and EMEA are the largest revenue generators, each region with about a third of global revenue.

“We’re expecting a telecom 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. Operators have to invest in their networks or they’ll disappear — competition is too cut-throat not to,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Téral adds: “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 US; NTT DoCoMo and Softbank Mobile in Japan; and KT, LGU+, and SK telecom in South Korea. China recently revealed a US$58 billion economic stimulus package to fund a fresh round of investment in telecom infrastructure. Meanwhile, Europe’s Big 5 have increased capital intensity by 2 percentage points for the first time in 5 years, right in the middle of the critical economic downturn! As for Latin America, operators already spiked, with capex there up 25% in 2011, led by América Móvil and Telefónica.”

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