Dollar SignTelecom operators around the world invested heavily in fiber optic and 4G LTE networks in 1H 2014 as they continued a transformation from voice- to data-centric infrastructure and services, according to a Carrier Economics report released by the Dell’oro Group September 30.

Telecom operators’ capital expenditures (capex) increased at a mid-single digit rate during 2014’s first half. Mobile network infrastructure capex registered a double-digit increase, outpacing the low single-digit growth in service revenues significantly.

Additional highlights from the Dell’Oro Group Carrier Economics Report include:

  • The amount of mobile capex required to support incremental mobile data usage has declined more than 50% per year since the smartphone boom started;
  • Fiber and LTE coverage build-outs will continue to drive telecom equipment investments in 2H14 and 2015. The proportion of capex that will be allocated to new technology enablers and network topologies including NFV and small cells is expected to be negligible over the next six quarters.

Telecom Capex Forecast
“While we maintain our view that worldwide capex will grow around three percent in 2014, we believe multiple factors will contribute to a decline in capex during 2015,” Stefan Pongratz, Dell’Oro Group’s Carrier Economics analyst, was quoted in a press release.

“Higher device penetration, decelerating mobile data growth rates, lack of new revenue streams, and increased competition in both the developing and developed markets have caused worldwide revenue growth to decelerate in the last couple of years,” Pongratz continued.

“Slower growth in service revenues coupled with the rapid network progress during 2014 in China, North America, Japan, and Europe will also put some pressure on worldwide capex upside in 2015,” he concluded.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!