Look for telcos to step up their equipment spending next year, particularly in Asia. So says Infonetics Research in a new report that provides insight into telecom spending trends.
"With 3 quarters of the data in and a careful review of carrier investment plans for each major world region, overall telecom service provider capex is on track to be up close to 4 percent this year led by Asia and North America, and 2013 is looking bright for all regions," noted Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
The report says that telecom capex increases in 2012 are being driven primarily by investments in video and wireless infrastructure. Global service-provider revenue is on track to reach US$1.9 trillion this year.
Incumbent carrier capex on the whole is flat to slightly down this year, but independent wireless operators, competitive operators, and cable operators are increasing capex, led by the independent wireless operators, increasing capex 12 percent this year.
Spending on every type of telecom equipment except optical and TDM voice will be up this year, Infonetics noted. Major areas of investment through 2015 include fiber-based wireline broadband, 2G mobile network capacity expansion, 2G migration to 3G, and migration to LTE projects.
Asia Pacific will account for about one-third of global service provider revenue by 2016, propelled by wireless giant China Mobile, and wireless pure-play operators will account for nearly one-third of all telecom capex by 2016, driven by 3G and LTE rollouts in China, India, and Africa.
"With investment plans out from AT&T and Deutsche Telekom, combined with the plans of a long list of major and smaller operators around the globe, we can safely say that 2013 and 2014 will be positive capex years, which is good news for vendors," Téral added. "Deutsche Telekom's 30-billion, 3-year investment plan announced this month will help lead a return to investments in the EMEA region. Service providers have no choice but to invest in their networks now; some have been restricting capex for so many years that they are experiencing network outages, unable to handle exploding traffic. There is very high demand for telecom services everywhere, particularly for mobile broadband.
Follow editor Craig Galbraith on Twitter @Craig_Galbraith .