Global equipment capex to shrink 6% in 09

Dylan Bushell-Embling
20 Nov 2009
Daily News

Global spending on telecom equipment is expected to shrink by up to 6% in 2009, and will continue to contract until 2011, according to research firm Infonetics.

“Global telecom service provider capital expenditures hit a plateau in 2008, marking the end of a five-year investment cycle and the beginning of a three-year disinvestment cycle, albeit a less dramatic one than what followed the great telecom crash of 2000,” Infonetics analyst Stéphane Téral said.

Service providers worldwide spent $305 billion in capital expenditure in 2008, the report revealed.

Capex will bottom out in 2010, and a new investment cycle will start some time in 2011, Téral added. This growth will be brought on by 3G rollouts in India and Central America, and the ramp-up of LTE deployments in Australia, Japan, the US and Western Europe.

It said mobile network equipment will continue to dominate total global telecom investment, followed by spending on voice gear.

But global service provider revenue is forecast to decline only very slightly in 2009 to $1.67 trillion, due mainly to currency fluctuations, and the recession-proof nature of mobile services.

Likewise, mobile infrastructure will continue to dominate global telecom capex spending in the years ahead.

The report also ranks the world's ten largest operators by 2008 revenue. In order of largest to smallest, these are: AT&T, NTT, Verizon, Deutsche Telekom, France Telecom, Vodafone, China Mobile, Telefónica, BT, and Sprint.

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