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V3.co.uk

Rush for 4G drives mobile telco spending

But US expected to remain flat in terms of capital expenditure

  • Robert Jaques
  • 07 July 2008
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Mobile
Global capital expenditure on mobile communications exceeded $131bn in 2007

The race for 4G is pushing up global capital expenditure on mobile communications, according to new research.

However, the US economy's uncertain outlook in 2008 is prompting ABI Research to predict that North America's mobile capital expenditure will remain flat this year.

Other regions will increase their capital expenditure commitments for new 2G/3G deployments or expansions, all-IP service discovery platform upgrades, soft-switch unified core systems and preparations for 4G.

ABI Research calculates that investment in 2007 exceeded $131bn, and will reach $163.5bn in 2013.

The Asia-Pacific and North American regions are estimated to be the biggest spenders.

"Mobile industry spending in Asia-Pacific is driven primarily by the emerging markets that are expanding current 2G network footprints and new 3G rollouts. Many nations in this region have yet to release their 3G licences," said ABI Research analyst Hwai Lin Khor.

"Mature markets such as Japan, Korea, Taiwan and Hong Kong will be spending on service delivery platforms, 4G base stations and related components, IMS and in-building wireless systems.

"North American spending is primarily driven by 3G upgrades to HSDPA/HSPA for the WCDMA evolution and EVDO Rev A for the CDMA evolution, as well as activities around mobile WiMax."

ABI notes that most current capital expenditure is still directed to voice services and 2G networks expansion, as the majority of subscriber net additions in recent years are coming from emerging markets that are "fairly contented" with simple voice calls and messaging services.

However, the analyst firm also identified increased awareness of the need for early investment to ensure that networks are ready to support the capacity demanded by higher bandwidth data services.

Increased Edge, 3G and subsequently 4G deployments will mean higher capital expenditure investment for data services and for the respective technologies.

"Capital expenditure for data services will surpass that for voice sometime in 2009 as 4G starts to arrive," added ABI.

"By 2013, the percentage split will be 28 per cent for voice, 67 per cent for data, and five per cent for mobile TV."

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