Service Providers Spent Less on Network Infrastructure Investment in 2009: Report

By Anamika Singh, TMCnet Contributor

Infonetics Research, a market research and consulting firm, released its first edition of its 2010 biannual Service Provider Capex, Opex, ARPU, and Subscribers report, presenting on how current economic conditions are impacting telecom markets by region and equipment segment.

The report said that worldwide, service providers spent $295 billion in 2009 on telecom and non-telecom capital expenditure projects, which is 5.9 percent less than they spent in 2008.

Also, the report revealed that carriers reduced investment in network infrastructure by 8 percent in 2009, with the cuts in IP voice infrastructure, optical network equipment, video infrastructure, and IP routers.

In the area of mobile infrastructure, spending make up the largest portion of all network infrastructure investments made by service providers, making it 19 percent.

Worldwide, service providers took in $1.65 trillion in revenue in 2009, a decrease of 4.2 percent from 2008, the report says. Carrier revenue is expected to resume growth in 2010.

"As world economies climbed out of recession, telecom service providers reduced their capital expenditures 5.9 percent worldwide in 2009, in line with our predictions and much less than many had expected. Carrier capex didn't tank like it did in 2001 for two main reasons: service providers are operating with clean balance sheets, having learned that lesson from the great telecom crash, and the demand for broadband today is very real indeed. Now, don't declare victory yet, as we forecast worldwide carrier capex to decline again and bottom out in 2010, followed by a new investment cycle starting in 2011 driven by a wave of 2G upgrades, 3G and LTE (News - Alert) rollouts, and fiber-based wireline broadband initiatives around the globe," explained Stéphane Téral, principal analyst for mobile and FMC infrastructure at Infonetics Research (News - Alert).

 Infonetics' capex report tracks revenue, capex, capex-to-revenue ratios, opex, ARPU, subscribers, and access lines of 184 public and semi-private/government-owned service providers on a monthly and biannual basis. The report includes past, current, and forecast capex and revenue data through 2014 and equipment forecasts through 2010.

(source: http://www.tmcnet.com/channels/atca/articles/86876-service-providers-spent-less-network-infrastructure-investment-2009.htm)