Ovum: No slowdown in network operator spending evident in 4Q07

MARCH 4, 2008 -- Ovum (search for Ovum) today posted its analysis of fourth-quarter 2007 revenue and capital spending by North American network operators. Fixed telecom revenues were largely flat to down among top-tier service providers, although AT&T and Bell Canada eked out small gains, says the research firm.

Despite the poor revenue growth, wireline telecom operator capex increased by 12.4% versus the fourth quarter of 2006. Cable MSOs saw revenues increase 13.6%, while holding spending growth to just 8.6%. Mobile revenues remained on trend, growing nearly 10%, while mobile capex fell 11.4%.

4Q07 highlights for North American network operators:

• Wireline revenues = $43.8 billion, up 1.2% versus 4Q06
• Wireline capex = $8.8 billion, up 12.4% versus 4Q06
• Cable MSO revenues = $17.3 billion, up 13.6% versus 4Q06
• Cable MSO capex = $3.7 billion, up 8.6 versus 4Q06
• Mobile revenues = $38.6 billion, up 9.8% versus 4Q06
• Mobile capex = $6.3 billion, down 11.4% versus 4Q06

"The fourth-quarter jump in wireline capex provided a year-end boost to 2007 equipment shipments," reports John Lively, vice president of network infrastructure at Ovum. "North American switching and routing sales grew 23%, and optical networking grew 31% in the fourth quarter compared to last year. AT&T drove the growth in wireline capex, and Comcast was the big spender among cable MSOs," he says. "Mobile capex was held back by Sprint, which spent 37% less than a year ago, despite a 73% increase versus 3Q07. "

Ovum's Global Capex service provides quarterly analysis and detailed annual forecasts of revenue and capital spending for North American, European, and Asian network operators.

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