Telecom capex, revenue growth slowing

Dylan Bushell-Embling
31 Jan 2012

Despite a strong 2011, global telecom operator capex is showing signs of slowing down both globally and in the APAC region, and global revenue growth may also be drying up.

Research firm Ovum has forecast that global telecom service revenue growth will slow to 2.9% for the period between 2010 and 2017, less than half of the 6.3% growth from 2004-2010. Capex is similarly forecast to fall to 3.1% from 6.5% over the same period.

The declines are forecast despite a rebound for the telecom industry in 2011, with revenue growing 7% to $1.96 trillion and capex up 12% to $314 billion.

But according to Ovum principal analyst Matt Walker, “macroeconomic weakness is constraining top-line service provider revenue growth.” He added that operators are responding by “aggressively attacking their cost structures, both capex and opex.”

According to a separate report published last week by ABI Research, the anticipated slowdown in capex growth could be even more sharp in the Asian mobile market.

ABI predicts that Asian core and radio access infrastructure capex growth will slow to 5.7% this year, compared to 29.1% in 2011.

Total Asian mobile capex will reach $58.8 billion during 2012, the research firm estimates.

Of this, over 63% will be spent on radio access infrastructure, as operators prepare for increasing 3G and 4G adoption.

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