Telco network spend set to rise

Telecoms operators worldwide will step up their investment in network equipment over next few years, as they upgrade their mobile networks and deploy fiber to handle exploding traffic, Infonetics Research predicts
 
A report by the research firm shows that telecom capex increases in 2012 are being driven primarily by video and wireless infrastructure investments.
 
“Overall telecom service provider capex is on track to be up close to 4% this year led by Asia and North America, and 2013 is looking bright for all regions,” says Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
 
While incumbent carrier capex on the whole is flat to slightly down this year, independent wireless operators, competitive operators, and cable operators are increasing capex. Spending on every type of telecom equipment except optical and TDM voice will be up this year, the firm forecasts.
 
The major areas of investment through 2015 include fiber-based wireline broadband, 2G mobile network capacity expansion, 2G migration to 3G, and migration to LTE projects. 
 
“With investment plans out from AT&T and Deutsche Telekom, combined with the plans of a long list of major and smaller operators around the globe, 2013 and 2014 will be positive capex years, which is good news for vendors. Deutsche Telekom's €30-billion three-year investment plan announced this month will help lead a return to investments in the EMEA region,” Téral notes.
 
Asia Pacific will account for about a third of global service provider revenue by 2016, propelled by China Mobile, the world's largest mobile operator by revenue and subscribers. Wireless pure-play operators will account for nearly a third of all telecom capex by 2016, driven by 3G and LTE rollouts in China, India, and Africa. 
 
“Service providers have no choice but to invest in their networks now; some have been restricting capex for so many years that they are experiencing network outages, unable to handle exploding traffic. There is very high demand for telecom services everywhere, particularly for mobile broadband,” Téral added.

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