Infonetics: EMEA telecom carrier capex up 7% in 2006

APRIL 26, 2007 -- Capital expenditures of service providers in the EMEA (Europe, Middle East, and Africa) region totaled 59.2 billion euros in 2006, up 7% from 2005, and are projected to increase 8% to 63.8 billion euros in 2010, says Infonetics Research (search for Infonetics) in its new "Service Provider Capex, Opex, ARPU, and Subscribers: EMEA 2H06" report.

"Major incumbents and large service providers in the EMEA region have made it clear that capex will be allocated only to projects that have been identified as revenue growth engines, and all public service providers continue to keep an eye on cash flow," said analyst Stéphane Téral of Infonetics Research.

"Deutsche Telekom and France Télécom accounted for about a quarter of all EMEA carrier capex in 2006 (a 2-billion-euro increase over 2005). Both companies are coping with fierce competition in their home turf and have to invest in new broadband-based infrastructures and new types of services such as FMC to respond to the competition," Téral added.

Overall, EMEA players acknowledge the tough competitive situation they are facing, but remain cautiously optimistic about potential single-digit growth to be generated by new bundles of multimedia services, including online gaming, the report shows.

Report highlights include:

• Over the 5-year period from 2006 to 2010, EMEA service providers will spend a cumulative 309.6 billion euros on capital expenditures.
  
• The combined revenue of all public EMEA carriers (incumbents, competitives, and wireless) is up 3% in 2006 to just over 400 billion euros.
  
• Of the capex going to telecom and datacom equipment, the top three investment areas for EMEA carriers in 2006 were voice, mobile radio access networks, and optical equipment.
  
• Many EMEA providers expect spending in 2007 will increase to sustain developments in two major growth areas: broadband wireless and wireline services.
  
• The number of broadband subscribers in the EMEA region will nearly double between 2006 and 2010.
  
• The number of mobile subscribers in EMEA is forecast to reach 1.4 billion in 2010>
  

Infonetics' report tracks revenue, capex, capex-to-revenue ratios, opex, ARPU, subscribers, and access lines of public and semiprivate/government-owned service providers in Europe, the Middle East, and Africa, including over 60 subregions and countries. The report includes pivot tables for customizing analysis with data viewable by service provider, service provider type, sub-region, and/or category.

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