Yankee Group: Global telecom spending on the rise

In 2011, global capital spending will increase 2.9 percent over 2010, with capital spending increasing across most regions--except North America, which will be down slightly--according to Yankee Group’s latest report.

In 2011, global capital spending will increase 2.9 percent over 2010, with capital spending increasing across most regions--except North America, which will be down slightly--according to Yankee Group’s latest report.

Yankee Group’s new report, “2011 Global Telecom Capex Forecast: Emerging Markets Drive Spending Recovery,” shows growth in telecom spending for the first time since 2009.
The rebound in growth is credited to pent-up consumer demand for mobile broadband services. Mobile operators around the world are entering a new network upgrade cycle driven by the rollout of 4G networks based on HSPA+, WiMAX, and LTE. The rebound will also be seen in emerging telecom markets, where capital spending is required to bring both basic and advanced services to the masses, predicts the report.

“Now that we’ve passed through the worst of the macroeconomic doldrums, 2011 represents the beginning of a new cycle of capital spending in the telecommunications market,” says Brian Partridge, Yankee Group vice president and co-author of the report. “As consumer demand for broadband connectivity continues to explode, we expect to see modest capex growth year over year through 2014.”
The report also indicates:
  • China exceeds expectations. Despite predictions of aggregate capex decreases in the region for 2010, Chinese telecom operators showed remarkable resilience in 2010; this year, China Mobile, China Unicom and China Telecom combined will increase capital spending by 10 percent, from $35.3 billion to $38.9 billion.
  • North American capex will decline by 3 percent. North American operators will decrease spending slightly, from $70.8 billion in 2010 to $68.7 billion in 2011, making North America the only region reducing capex in 2011.
  • Capital spending will continue to rise through 2014. Global capex will increase from $275.7 billion in 2011 to $302.2 billion in 2014.
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