Report: U.S. LTE opex to outpace capex starting in 2015

As U.S. mobile operators watch their LTE subscribers grow, they are also seeing their LTE operating expenses take off, meaning their opex will outpace capex spending starting in 2015, according to a new report from iGR.

Total U.S. LTE infrastructure capex will reach $37.5 billion, a number exceeded by total opex expenditures, which will reach $57.4 billion during the same period, forecasts iGR.

"While iGR expects the overall LTE network operating cost per subscriber to increase, the operating expense per cell site will decline due to increased efficiencies in the network," said the firm.

The research firm said its LTE cost model reflects the amount of data the network is able to support and deliver. The capex cost model is based on the cost required to add 1 GB of data capacity to the network, while the opex cost model is based on the cost per user per month.

In a related report, Dell'Oro Group also reported worldwide wireless capex will grow at a slower rate this year than it did in 2012. The market is being kept afloat by widespread deployments of LTE, which is offsetting declines in both 2G and 3G technologies.

Stefan Pongratz, director of mobile RAN research at Dell'Oro, said the launch of commercial public access small cells in licensed spectrum continued to be pushed out during the first quarter of 2013, but macrocells generated year-over-year growth during the same period.

"We expect the macro BTS segment to reach new record levels in 2013 as service providers continue to prioritize LTE coverage and network modernization," said Pongratz.

Dell'Oro said Ericsson (NASDAQ:ERIC), with a four-quarter trailing revenue share of almost 40 percent in the combined WCDMA/LTE market, remained the market share leader in mobile broadband during 2013's first quarter. Huawei and Nokia Siemens Networks maintained their No. 2 and No. 3 rankings in the combined WCDMA/LTE market.

For more:
- see this iGR release
- see this Dell'Oro release

Related articles:
CTIA: U.S. wireless network traffic reaches 1.468 trillion MB in 2012
LTE reversing downward trend in RAN capex
Madden: Cloud RAN or small cells?
Small cells will generate 9% of mobile RAN revenues in 2016
Network infrastructure vendors face tough Q2, road ahead

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