Mobile capex to be flat until 2019, IHS predicts

The investment cycle driven by LTE deployments ran from 2011 to 2015, and 2016 will usher in the beginning of an extended plateau, IHS predicted.

Mobile carriers’ capex investments worldwide will remain flat until they begin to pick up in 2019, according to a new report from IHS Markit.

The market research firm said the investment cycle driven by LTE deployments ran from 2011 to 2015, and 2016 will usher in the beginning of an extended plateau. Overall economic health is gradually returning to the segment, however, and should see low single-digit growth this year.

“2015 marked the end of a five-year global investment cycle that started in 2011 driven by massive LTE rollouts and their related fixed networks (core and transport),” IHS said in an announcement touting its latest report. “This cycle was characterized by synchronization between geographical regions, low single-digit yearly growth resulting from fewer but larger service providers that enjoy economies of scale, and various regional and national agendas.”

Sponsored by Southco Inc.

How To Secure 5G Equipment With Electronic Access

Learn how to protect small cell enclosures from physical threats and deliver better, stronger and more reliable networks with electronic locks and access control systems.

And this year has seen “the beginning of desynchronized investments” between global markets that will remain until the segment begins to pick up steam in 2019 as commercial deployments of 5G begin to come online. Fiber-based fixed broadband and backbone networks will be major areas of spending, the firm said, but carriers such as KT, NTT DoCoMo and SK Telecom—which are typically big network spendors—don’t expect to see major capex hikes.

“As a result, we expect global telecom capex to increase at a five-year (2016-2020) compound annual growth rate of 0.8%, reaching $353 billion in 2020,” the IHS report said. “This forecast is based on the assumption that an economic recession or other major event will not derail our model over the next four years.”

IHS reported earlier this month that 2016 will likely be the first year of declining 2G, 3G and 4G macrocell deployments, and the market for network software has begun to look significantly healthier than the hardware market.

“The transition to software is happening,” IHS said previously. Software will sustain the entire mobile equipment market until 5G kicks in, it added, creating an inflection point and bringing some much-need growth—though moderate at best.”

Suggested Articles

Dish's chief network officer says everything the company is designing is geared toward slicing.

Select Spectrum is a spectrum broker that’s been around for 10 years. It has already facilitated deals amounting to more than $400 million.

The global pandemic has taken a huge toll on McAllen, Texas, but there is one silver lining: every citizen is now able to access the internet.