Report: Telecom capex spike expected in 2012; Asia is largest spender

Market research firm Infonetics Research released excerpts from a report analyzing and forecasting telecom operator revenue and capital expenditures (capex).  Based on the report, Infonetics expects worldwide capex to spike in 2012, then level out in 2015 and 2016 at around the $345 billion mark.



Market research firm Infonetics Research released excerpts from a report analyzing and forecasting telecom operator revenue and capital expenditures (capex).  Based on the report, Infonetics expects worldwide capex to spike in 2012, then level out in 2015 and 2016 at around the $345 billion mark.


“We’re expecting a telecom capex hike in 2012 as operators around the world ramp their spending like crazy to launch LTE networks, modernize their mobile networks, and carry out national wireline broadband initiatives,” says Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research (Campbell, Calif., USA).  “Operators have to invest in their networks or they’ll disappear — competition is too cut-throat not to.”


According to Teral, the high demand for telecom services globally, particularly mobile broadband, is fueling the latest investment cycle. The key capex contributors in 2012 will be Clearwire, Sprint, and T-Mobile USA in the US; NTT DoCoMo and Softbank Mobile in Japan; and KT, LGU+, and SK telecom in South Korea, according to Teral.


China recently revealed a $58 billion economic stimulus package to fund a fresh round of investment in telecom infrastructure. Meanwhile, Europe’s Big 5 have increased capital intensity by 2 percentage points for the first time in 5 years, right in the middle of the critical economic downturn,” says Teral “As for Latin America, operators already spiked, with capex there up 25% in 2011, led by America Movil and Telefonica.”


Global telecom carrier capex grew 3% to $301 billion in 2011 from 2010, while spending on every type of network equipment grew in 2011, with the exception of TDM voice, which continued its steep decline.


Asia Pacific was again the largest telecom carrier capex region, followed by EMEA (Europe, Middle East, Africa).


Telecom service provider revenue grew 6% to $1.8 trillion worldwide in 2011 over 2010, says Infonetics. Operators in Asia Pacific and EMEA are the largest revenue generators, each region with about a third of global revenue.