Capital expenditure by mobile operators will contract by 7% in 2013, to $98.6 billion, as economic uncertainty and network maturity squeeze spending, according to a new report from ABI Research.
Although the outlook this year is gloomy, the market-research company expects capex to rise by 6% in 2014, to $104.5 billion, bolstered by commitments to roll out LTE technology in an ever-expanding list of countries.
The study reveals mixed fortunes in different parts of the world, with Western Europe the main drag on overall spending.
“In North America, mobile carrier capex will grow 2.1% to US$13.4 billion as the accelerated LTE equipment spend programs from AT&T, Verizon Wireless, T-Mobile [and others] concentrate spending in 2013,” said Jake Saunders, the vice president and practice director of core forecasting at ABI Research. “On the other hand, in Western Europe, capital expenditure will contract 1.1%, as maturing networks, and economic uncertainty, trim capex.”
In the Asia-Pacific, meanwhile, operators in Korea and Japan are rapidly signing up new LTE customers, while South-East Asian countries are also starting to demonstrate some LTE traction.
Nevertheless, although India handed out some LTE-TDD licenses in early 2012, a lack of affordable handsets and high tariffs have kept subscriber adoptions in check, while authorities in China have yet to award any LTE licenses.
According to Aditya Kaul, the mobile infrastructure practice director at ABI Research, capex in Eastern Europe will grow by 2.4% in 2013, reflecting the build-out of LTE and 3G networks.
“3G subscriber adoption has gone past 41% penetration for the region,” said Kaul.
Meanwhile, in the Middle East, Africa and Latin America, capex growth will range from 1% to 3%.
With voice-centric coverage largely complete in these regions, operators have been addressing 3G and mobile-data capacity challenges, but there has not yet been the ‘data crunch’ seen in more developed markets.