6 October 2003 Boston Lightwave--North American service providers will spend $48.9 billion on capital expenditures (capex) in 2003, a 21% reduction from 2002, while slightly increasing their revenue, bringing their capex-to-revenue ratio to a healthy 14%, according to Infonetics Research's latest market research report, "Service Provider Roll Call and CapEx Analysis, North America 2003."
"Service providers are right on target for meeting their goal of getting capex-to-revenue ratios back in line with historical norms this year," said Kevin Mitchell, directing analyst for Infonetics Research and lead author of the report. "IXCs [Interexchange carriers] and CLECs [competitive local-exchange carriers] have made severe capex cuts, making a dramatic impact on the overall capex-to-revenue ratio. RBOCs [regional Bell operating companies] and MSOs [multiple system operators] have made less severe cuts, but their cuts have a very significant effect on the overall capex picture because they're big spenders: RBOCs represent 44% of total capex spending in 2003 and MSOs represent 23%. Meanwhile, the IOCs [independent operating companies] remain stable in their spending, which slightly increases their proportion of the spending pie, from 5% in 2002 to 7% in 2003."
While a reduction in capital expenditure spending generally has a short-term negative effect on vendors selling to service providers, capex-to-revenue ratios of around 15% prepare service providers for longevity and are a sign of financial health, which is positive for the service provider market overall for the long term.
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Infonetics Research's report tracks RBOCs, CLECs, ILECs (incumbent local-exchange carriers), IOCs, IXCs, and MSOs in the U.S. and Canada, such as Allstream, Bell Canada, Cavalier Telephone, Choice One, Cogent, Cox Communications, Everest Broadband Networks, FairPoint, Level 3 , Yipes Enterprise Services, and Z-Tel Communications.
The report provides capital expenditure analysis on public facilities-based service providers, including:
• Revenue for 2000, 2001, and 2002, and forecast for 2003;
• Capital expenditures for 2000, 2001, and 2002, and forecast for 2003;
• Capital expenditure-to-revenue ratio for 2000, 2001, 2002, and 2003; and a
• Notes section for management guidance and forecast information.
Profiles and up-to-date information on 100 public and private facilities-based service providers and the services they offer are also included in the report, covering:
• Network overview:
Manufacturers used for routers, switches, broadband aggregation, optical, next gen voice;
Number of points of presence, central offices, data centers; and
Backbone technology: ATM, IP, MPLS.
• Business and residential data services (e.g., frame relay, leased lines, ATM, VPN, managed firewall, fixed wireless, mobile wireless);
• Carrier data services;
• Hosting services: colocation, shared and dedicated hosting,storage;
• Voice services: local and long distance TDM, mobile, voice over packet;
• Demographics (headquarters contact information, alliances/subsidiary relationships, number of employees, territories covered, technical executive contact).
This report is part of the "International Service Provider Roll Calls and CapEx Analysis 2003 series," which monitors facilities-based service providers in North America, Europe, and Asia Pacific. All reports are created in Microsoft Excel and are easily downloadable via Infonetics Research's online service portal.