Report: LTE infrastructure spending to peak at $23.3B in 2015, then start declining

For the past several years, carriers in the U.S. and around the world have been furiously rolling out LTE networks in a bid to increase capacity, boost speeds, offer new services and get more revenue from customers. That spending from carriers is expected to peak at around $23.3 billion in 2015 and then start to decline as a result of a diminishing number of LTE deployments, according to a new report from IHS Infonetics.

"As we anticipated, we're reaching the peak of LTE rollouts, and LTE is now set to perform at $6 billion a quarter for some time as operators complete their major remaining rollouts," IHS analyst Stéphane Téral said in a statement.

According to the report, LTE infrastructure revenue clocked in at $6 billion worldwide in the first quarter of 2015, a 1 percent sequential decline from the fourth quarter. IHS Infonetics said that LTE rollouts were not strong enough in the first quarter to fully offset a sharp year-over-year decline of 2G and 3G network spending, resulting in an 8 percent sequential decline for the global 2G/3G/4G mobile infrastructure market, which came to $11 billion.

On a year-over-year basis, the report said, 2G/3G/4G mobile infrastructure market was up 4 percent in the first quarter, driven by continued strong TD-LTE activity in China.  

In the U.S., the Tier 1 wireless carriers are expected to complete their macro LTE buildouts this year. Chinese carriers have been building out their LTE networks at a furious pace, as have European carriers looking to catch up to peers in the U.S., Japan and South Korea. LTE deployments will continue for years to come in Africa and Latin America, but the pace is expected to drop off after years of heavy investment.

That phenomenon is already being seen in the U.S., where tower companies have noted a pause in carrier spending, especially following the AWS-3 spectrum auction, which garnered more than $41 billion in net winning bids. Over the next few years that spectrum will be deployed, which will lead to an uptick in infrastructure spending.

Additionally, carriers are still spending money to densify their networks. Verizon  Wireless (NYSE: VZ) is deploying small cells, AT&T Mobility (NYSE: T) will soon deploy 2.3 GHz WCS spectrum for LTE and Sprint (NYSE: S) is ramping up for a massive network densification project. T-Mobile US (NYSE:TMUS), meanwhile, is busy deploying its 700 MHz A Blocks spectrum for LTE in a quest to get to 300 million POPs covered with LTE by year-end.

For more:
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