Worldwide telecom carrier Capex (capital spending) is expected to decline $6 billion in 2015, said Dell’Oro Group.

The statement does not say what will be the total Capex by telecom operators next year. It also does not share region specific details.

On the other hand, telecom Capex will grow at around 3 percent in 2014.

The decline in 2015 will create significant impact on telecom network vendors such as Alcatel-Lucent, Ericsson, Huawei, Nokia Networks, Cisco, ZTE, NEC, etc.

Several factors will drive down the Capex growth in 2015.

Higher device penetration, decelerating mobile data growth rates, lack of new revenue streams, and increased competition in both the developing and developed markets caused revenue growth to decelerate in the last couple of years.

Slower growth in telecom service revenues coupled with the rapid network progress during 2014 in China, North America, Japan, and Europe will also put some pressure on worldwide Capex upside in 2015, said Stefan Pongratz, Carrier Economics analyst at Dell’Oro Group.

The amount of mobile Capex required to support incremental mobile data usage has declined more than 50 percent per year since the smartphone boom started.

Fiber and LTE coverage build-outs will continue to drive telecom equipment investments in H2 2014 and 2015.

The proportion of Capex that will be allocated to new technology enablers and network topologies including NFV and small cells is expected to be negligible over the next six quarters.

The report said telecom operators invested heavily in their fiber and LTE networks in H1 2014 as the transformation from voice-centric to data-centric drivers continued.

Dell’Oro Group estimates worldwide Capex advanced at a mid-single digit rate in 1H14. Double-digit growth in mobile network infrastructure significantly outpaced the low single-digit growth in service revenues.

Baburajan K
[email protected]