Telecom Carrier CAPEX Expected to Pick Up in 2011, Driven by Mobile Broadband

­Global CAPEX (capital expenditure) is forecast to decline at most 6% in 2009, mainly due to a significant CAPEX shakeout in the Middle East and Africa, a weakening US dollar, expected declines in the Brazilian real and Mexican peso, and delays in US broadband stimulus funding, reports Infonetics Research.

"Global telecom service provider capital expenditures hit a plateau in 2008, marking the end of a 5-year investment cycle and the beginning of a 3-year disinvestment cycle, albeit a less dramatic one than what followed the great telecom crash of 2000. Capex will bottom down in 2010 and a new investment cycle will start in 2011, driven by 3G rollouts in India and Central and Latin America, the start of 3G rollouts in Africa, and a ramp-up in LTE deployments in Australia, Brazil, Western Europe, Japan, and North America," predicts Stéphane Téral, principal analyst for mobile and FMC infrastructure at Infonetics Research.

Infonetics anticipates a year-end bump up in CAPEX , which could bring the overall capex decline in 2009 to less than 6%. Optical network hardware is a bright spot in today's tightened CAPEX environment, with decent single-digit percent spending growth expected in 2009, despite currency devaluations.

Mainly due to currency effects, worldwide service provider revenue is forecast to decline only very slightly in 2009, to $1.67 trillion, driven by mobile communication services, as consumers continue to hold on to their mobile services during tough economic times.

In addition, mobile infrastructure will continue to dominate total global telecom and datacom spending, followed by voice equipment.

Posted to the site on 20th November 2009