Future not rosy for infrastructure vendors, says ABI Research

Following what it called extensive research, mobile operator Capex on key network items will only see a marginal 3 per cent growth in 2010, claims a new report from ABI Research.

Commenting on the findings, Jake Saunders, ABI's VP for forecasting, said that "the long-term prospects for network infrastructure revenues were not rosy. The consequences can already be felt in the marketplace as competition cuts equipment prices and forces equipment vendors to consolidate."

These tough conditions mean that operators are currently enjoying a buyers' market dominated by multinationals such as Vodafone, Orange, Telefonica and MTN. These firms have established framework agreements enabling them to get the best deals from equipment vendors.

Such is the state of the equipment market, Saunders believes there is the possibility for one of the existing European infrastructure vendors to merge with Huawei or ZTE to gain market share, albeit that this would likely trigger strong opposition due to security worries.

On a more positive note, ABI believes that, although LTE cellular services have only just launched in some countries, the expenditure on this 4G equipment is set to exceed 3G equipment investment by 2012, with the total spending forecast to exceed $12 billion in 2010.

For more on this story:
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