SOURCE: Infonetics Research

Infonetics Research

December 14, 2010 14:35 ET

Infonetics Research: Overall telecom carrier spending to pick up in 2011 due to video, 3G, LTE investments

CAMPBELL, CA--(Marketwire - December 14, 2010) - Communications industry market research firm Infonetics Research (www.twitter.com/infonetics) released its updated Service Provider Capex, Opex, ARPU, and Subscribers 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 US$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 US$321 billion in 2014 before growth slows again. Overall, capital intensities will continue to slowly decline through at least 2014 because the world's telecom infrastructure is essentially built out, and unless a nuclear bomb wipes out some of it, there is no need to increase capital intensities," expects Stéphane Téral, principal analyst for mobile and FMC infrastructure at Infonetics Research.

REPORT HIGHLIGHTS

  • From its peak in 2008, worldwide service provider capex declined 5.3% in 2009, and is on track to decline another 3% 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% 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

ANALYST TELEBRIEFING
Stéphane Téral will present capex highlights in a live telebriefing Dec. 16, 8AM Pacific. Clients: Log in for conference call access.

REPORT SYNOPSIS
Infonetics' capex report tracks revenue, capex, capital intensities (capex-to-revenue ratios), opex, ARPU, subscribers, and access lines of 184 public and semi-private/government-owned service providers on a monthly and biannual basis. The report includes past, current, and forecast capex and revenue data through 2014 and equipment forecasts through 2010, market drivers, analysis, service provider demographics, and customizable pivot tables to analyze data by service provider, service provider type, and equipment category.

The report includes a Fundamental Telecom/Datacom Market Drivers report with analysis of overall market conditions for service providers, enterprises, subscribers, and the global economy. Regions include North America, EMEA (Europe, Middle East, Africa), Asia Pacific, CALA (Central and Latin America), and worldwide.

RELATED RESEARCH HIGHLIGHTS
See Report Highlights (http://www.infonetics.com/market-research-report-highlights.asp) for more:

RECENT AND UPCOMING SURVEYS AND FORECASTS
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SALES

Infonetics Research is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.

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