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Operators worldwide “spending like crazy” this year, says Infonetics

Telecoms operators around the world will drive a significant spike in capital expenditure (capex) this year as they seek to launch LTE networks and carry out other big projects related to wireless connectivity, according to a new report from US firm Infonetics Research.

“We’re expecting a telecom capex hike in 2012 as operators around the world ramp their spending like crazy to launch LTE networks, modernise their mobile networks, and carry out national wireline broadband initiatives,” said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. “Operators have to invest in their networks or they’ll disappear – competition is too cut-throat not to.

“High demand everywhere for telecom services, particularly mobile broadband, is fuelling the latest investment cycle,” he adds. “The key capex contributors in 2012 will be Clearwire, Sprint, and T-Mobile USA in the US; NTT DoCoMo and Softbank Mobile in Japan; and KT, LGU+, and SK telecom in South Korea.”

The analyst also points to China’s recently-announced US$ 58 billion economic stimulus package, designed to fund a fresh round of investment in telecom infrastructure, and to capex increases by Europe’s so-called ‘Big 5′ telecoms companies (Deutsche Telekom, France Telecom, Vodafone, Telecom Italia and Telefónica).

Global telecom carrier capex is estimated to have grown by 3% last year to reach US$ 301bn, with spending increasing on every type of network equipment except TDM voice, which continues its steep decline. Asia-Pacific was again the largest telecom carrier capex region, followed by Europe, the Middle East and Africa.

The research firm predicts that worldwide telecoms capex will spike in 2012, then level out in 2015 and 2016 at around the US$ 345bn mark. Wireless operators’ share of capex is forecast to grow from a quarter to nearly a third of global capex between 2012 and 2016, as the world continues to go mobile.

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