Infonetics anticipates a year-end bump up in worldwide global service provider capital expenditures, which could bring the overall capex decline in 2009 to less than 6 percent, and expects investment by carriers to pick up starting in 2011.

According to the company’s new report, 2009 Service Provider Capex, Opex, ARPU, and Subscribers, worldwide, global capex is forecast to decline at most by 6 percent this year, mainly due to a significant capex shakeout in the Middle East and Africa, a weakening U.S. dollar, expected declines in the Brazilian real and Mexican peso, and delays in U.S. broadband stimulus funding, according to the report.

 

"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,” says Stéphane Téral, principal analyst for mobile and FMC infrastructure at Infonetics Research (News - Alert). “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 (News - Alert) deployments in Australia, Brazil, Western Europe, Japan, and North America."

 

Infonetics sees optical network hardware as a bright spot, with expectations for single-digit percent spending growth expected in 2009, despite currency devaluations. However, mobile infrastructure continues to dominate total global telecom and datacom spending, followed by voice equipment, according to the report.

 

Nonetheless, the report notes, 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. The world's largest service providers, ranked by 2008 revenue, are AT&T, NTT, Verizon, Deutsche Telekom, France Télécom, Vodafone (News - Alert), China Mobile, Telefónica, BT and Sprint, according to the report.