A new report from Infonetics Research suggests that carrier capital expenditures (capex) appear to have grown in 2012 – a trend that the market research firm expects will continue this year. However, optical equipment vendors may find that they haven’t been invited to the party.
Infonetics makes the prediction in its Service Provider Capex, Revenue, and Capex by Equipment Type report, which tracks service provider revenue and capex by operator type, region, and equipment segment as well as offers insight into spending trends.
"With three quarters of the data in and a careful review of carrier investment plans for each major world region, overall telecom service provider capex is on track to be up close to 4% this year led by Asia and North America, and 2013 is looking bright for all regions," said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research, just before the holidays.
"With investment plans out from AT&T and Deutsche Telekom, combined with the plans of a long list of major and smaller operators around the globe, we can safely say that 2013 and 2014 will be positive capex years, which is good news for vendors,” Téral added. “Deutsche Telekom's 30 billion euro three-year investment plan [announced in December] will help lead a return to investments in the EMEA region. Service providers have no choice but to invest in their networks now; some have been restricting capex for so many years that they are experiencing network outages, unable to handle exploding traffic. There is very high demand for telecom services everywhere, particularly for mobile broadband.
Video and wireless infrastructures were the principal targets of telecom capex in 2012. Yet most areas will have seen spending increases, Infonetics says. Unfortunately, optical transport equipment, along with TDM voice, will prove to be one of the boats the rising capex tide didn’t float, the company predicts.
Looking ahead, major areas of operator investment through 2015 will include fiber-based wireline broadband access, 2G mobile network capacity expansion, 2G migration to 3G, and migration to LTE projects, the report forecasts. Pure-play wireless operators will account for nearly a third of all telecom capex by 2016, driven by 3G and LTE rollouts in China, India, and Africa, the report adds.
Global service provider revenue for 2012 should come in at $1.9 trillion, up 4% from 2011. Asia Pacific will account for about a third of global service provider revenue by 2016, propelled by China Mobile, the world's largest mobile operator by revenue and subscribers