Mobile operator capital expenditure is expected to grow 5% in 2011, to reach $119 billion. Radio Access Network equipment is still driving a respectable percentage of operators’ CAPEX. 56% of global operator CAPEX came from base station deployments, upgrades and swap-outs.
ABI Research vice president of forecasting Jake Saunders observes that, “Many operators are leaning towards small cell deployments (microcells, picocells and femtocells) to fill dead zones and boost coverage inside buildings. However operators are also still investing in improving the downlink and uplink performance of their networks, not just on LTE but also HSPA+. CDMA2000 networks are similarly continuing to upgrade.”
“A case in point,” Saunders continues, “is India's Sistema Shyam TeleServices. Recently ZTE secured their upgrade contract to roll out EV-DO Rev.B Phase2 in Rajasthan. Data throughput is expected to rise to 14.7 Mbps (with a three-frequency carriers bundle), which underscores that high performance data rates are not just the preserve of developed market operators.”
Core network spending also continues to increase. In 2011, core network expenditure is likely to approach $12 billion. Spending on core network equipment is expanding on a number of fronts. Operators are not only investing in LTE Evolved Packet Core upgrades but also soft-switches that enable voice and media gateways to handle media-rich mobile data more efficiently.
“There is still a considerable amount of 3G GGSN and SGSN investment going on,” adds practice director Aditya Kaul, “as a number of countries are still very much building out their 3G coverage and services. Over time, we anticipate greater investment in 4G-capable gateway architecture.”
There is still continuing economic uncertainty in a number of European countries as well as in the US regarding its $14 trillion debt cap, but operators can still see a clear need for capital investment.
ABI Research’s “Mobile Operator CAPEX Market Data” provides quarterly updates on 99 carriers’ CAPEX in both local and normalized US$ values, while the firm’s “Mobile Gateway and Server Market Data” offers quarterly and annual forecasts addressing the 3G and 4G Core Network marketplace.
ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 30+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.
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