Publicly owned wireline and mobile service providers in North America, Europe and Asia-Pacific spent a combined $192.8 billion on capital expenditures in 2005 and are projected to increase their capex 5 percent to $203.1 billion this year, according to three new reports from Infonetics Research.
Voice network spending generally is rising due to broadband, VoIP and wireless-network spending, as well as the move to IP/MPLS/Ethernet networks, said Infonetics in its Service Provider Capex Analysis series of reports. Meanwhile, investments in legacy gear are flat or declining, reflecting major incumbents’ cap-and-grow strategy, Infonetics found.
“The telecommunications industry has entered a new investment cycle, as demonstrated by the increase in carrier capex in all regions of the world,” said Stéphane Téral, principal analyst at Infonetics Research and lead author of the reports. “Interestingly, opex-to-revenue ratios are higher in Asia and Europe than in North America,”
Téral said that had a lot to do with U.S. telco consolidation.
Some of the reports’ findings include:
• In North America, carrier capex will increase 6 percent between 2005 and 2006, driven by Verizon and AT&T followed by the cable MSOs. Revenue will increase 4 percent and 2006 opex-to-revenue ratio is 62 percent.
• In Europe, carrier capex will increase 9 percent between 2005 and 2006. Revenue will increase 4 percent and 2006 opex-to-revenue ratio is 67 percent.
• In Asia-Pacific, carrier capex will increase 5 percent from last year, driven by NTT, which accounts for 29 percent of total capex in the region. Revenue will increase 3 percent and 2006 opex-to-revenue ratio is 69 percent.
Infonetics Research www.infonetics.com
