Capital expenditures of telecom service providers are up in every region of the world, says a new report from Infonetics Research, driven by carrier network transformation and migration projects, swelling numbers of mobile and broadband subscribers, and increasing demand for personal broadband services and high bandwidth video services such as mobile TV, mobile video, IPTV, and video on demand.
Service provider revenue is also up in all regions, as carriers launch new services to meet the demands of hundreds of millions of worldwide subscribers, the report shows.
"For the third year in a row, carrier capex has increased in all regions of the world, but we expect this investment cycle to plateau in 2009 and decrease in 2010. However, service providers in most regions are operating at a sustainable capex-to-revenue ratio in the 15% range, which should carry the market in these regions through the plateau without much disruption. The Asia Pacific region is worrisome, though, because the average capital intensity rate there is a high 21%, fueled by China's rapid growth. If that rate doesn't come down, we could be looking at the beginning of another telecom bubble in that region," said Stéphane Téral, principal analyst at Infonetics Research and lead author of the report.
Other highlights from the report:
- Public service providers worldwide spent a combined $216.2 billion on capex in 2006, up 13% from 2005; worldwide capex is expected to grow 4% in 2007 to $224.6 billion
- Service providers earned a combined $1.2 trillion in annual worldwide revenue in 2006, up 8% from 2005, and are expected to increase their revenue 4% by 2007
- Asia Pacific's share of worldwide telecom capex spending is forecast to peak at 34% in 2007, followed by EMEA with 31% and North America with 29%, although the weak dollar has inflated these percentages
- The 4 telecom and data networking equipment categories being invested in most heavily in 2006 and 2007 are mobile RAN, voice, optical, and broadband aggregation equipment
- The world's top 15 service providers account for roughly 50% of worldwide carrier capex spending
- The top service providers that will make up more or less half of all public capex spending in each region in 2007:
o AT&T, Sprint Nextel, and Verizon in North America
o Deutsche Telekom, France Télécom, BT, Telecom Italia, and Telefónica in EMEA
o China Mobile, China Telecom, and NTT in Asia Pacific
o América Móvil, Telmex, and Telefónica in CALA
Infonetics' Service Provider Capex, Opex, ARPU & Subscribers report tracks revenue, capex, capex-to-revenue ratios, opex, ARPU, subscribers, and access lines of public and semi-private/government- owned service providers. The report includes actuals and forecasts from 2005 to 2010, market drivers, in-depth analysis, service provider demographics, and pivot tables for customizing analysis with data viewable by service provider, service provider type, and equipment category.
Infonetics publishes capex reports for North America, Europe/Middle East/Africa, Asia Pacific, Caribbean/Latin America, and Worldwide.
Download sample data at www.info.infonetics.com. For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583- 3335.
Infonetics Research (www.infonetics.com) is an international market research and consulting firm specializing in data networking and telecom. Services include market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.
Service provider revenue is also up in all regions, as carriers launch new services to meet the demands of hundreds of millions of worldwide subscribers, the report shows.
"For the third year in a row, carrier capex has increased in all regions of the world, but we expect this investment cycle to plateau in 2009 and decrease in 2010. However, service providers in most regions are operating at a sustainable capex-to-revenue ratio in the 15% range, which should carry the market in these regions through the plateau without much disruption. The Asia Pacific region is worrisome, though, because the average capital intensity rate there is a high 21%, fueled by China's rapid growth. If that rate doesn't come down, we could be looking at the beginning of another telecom bubble in that region," said Stéphane Téral, principal analyst at Infonetics Research and lead author of the report.
Other highlights from the report:
- Public service providers worldwide spent a combined $216.2 billion on capex in 2006, up 13% from 2005; worldwide capex is expected to grow 4% in 2007 to $224.6 billion
- Service providers earned a combined $1.2 trillion in annual worldwide revenue in 2006, up 8% from 2005, and are expected to increase their revenue 4% by 2007
- Asia Pacific's share of worldwide telecom capex spending is forecast to peak at 34% in 2007, followed by EMEA with 31% and North America with 29%, although the weak dollar has inflated these percentages
- The 4 telecom and data networking equipment categories being invested in most heavily in 2006 and 2007 are mobile RAN, voice, optical, and broadband aggregation equipment
- The world's top 15 service providers account for roughly 50% of worldwide carrier capex spending
- The top service providers that will make up more or less half of all public capex spending in each region in 2007:
o AT&T, Sprint Nextel, and Verizon in North America
o Deutsche Telekom, France Télécom, BT, Telecom Italia, and Telefónica in EMEA
o China Mobile, China Telecom, and NTT in Asia Pacific
o América Móvil, Telmex, and Telefónica in CALA
Infonetics' Service Provider Capex, Opex, ARPU & Subscribers report tracks revenue, capex, capex-to-revenue ratios, opex, ARPU, subscribers, and access lines of public and semi-private/government- owned service providers. The report includes actuals and forecasts from 2005 to 2010, market drivers, in-depth analysis, service provider demographics, and pivot tables for customizing analysis with data viewable by service provider, service provider type, and equipment category.
Infonetics publishes capex reports for North America, Europe/Middle East/Africa, Asia Pacific, Caribbean/Latin America, and Worldwide.
Download sample data at www.info.infonetics.com. For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583- 3335.
Infonetics Research (www.infonetics.com) is an international market research and consulting firm specializing in data networking and telecom. Services include market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.
