By Telecom Lead Team: Service provider (SP) Capex and revenues grew
an estimated 12 per cent and seven per cent respectively in 2011, with Capex
reaching $314 billion and revenues $1,962 billion.
SP revenues will
advance at a CAGR of 2.9 per cent over the 2010-2017 period, which is down from
the historic CAGR of 6.3 per cent achieved in 2004-2010. There is a similar
slowdown with capex: capex expanded at a CAGR of 6.5 per cent in 2004-2010, but
this will likely slow to 3.1 per cent in 2010-2017.
2011 represents a
good bounce-back for the industry. However, macroeconomic weakness is
constraining top-line SP revenue growth. Service providers are coping with this
reality by aggressively attacking their cost structures, both Capex and Opex,”
said report author and Ovum principal analyst Matt Walker.
On the Capex front,
SPs have a number of tools to control costs without necessarily sacrificing
competitiveness: network sharing, software-based network elements and features,
pay-as-you-grow contractual terms, joint procurement, and M&A will all be
important.
On the Opex side,
carriers are increasingly turning to outsourcing, which has helped expand the
telco infrastructure services market to $71 billion.
This shift of SPs’
Opex to external vendors through outsourcing will bring new opportunities,
particularly in the area of services. Also, mobile operators’ share of total
Capex will continue to advance, from 56 per cent in 2011 to 62 per cent in
2017.
Recently,
ABI Research said that Asian telecom operator capital expenditure is expected
to grow at 5.7 percent in 2012 compared to 29.1 percent in 2011. Asian telecom
capital expenditure in 2012 is forecast to increase 5.7 percent year-on-year to
$58.8 billion.
Asian Telecom operators Capex to grow
5.7% in 2012 compared to 29% in 2011
Over
63 percent of the CAPEX budget for 2012 will focus on the construction of radio
access network infrastructure, 8 percent on upgrades and capacity expansions to
the core network, and 29 percent on development of new technologies and new
businesses, construction of backhaul transmission facilities, etc.
NTT
DoCoMo is expected to have transitioned 100 percent of its subscribers to 3G/4G
services by the end of March 2012 and switch off its 2G network completely.
DoCoMo completed a soft launch of its 4G LTE service in December 2010 and
subscribers have ratcheted up to 0.66 percent (390,000) of the operator’s
installed base.
KDDI’s
WiMAX subsidiary achieved 1.237 million users (3.54 percent share of installed
base) and 95 percent+ coverage of Japan’s main cities.
SoftBank
plans to launch its 4G TD-LTE service in mid-February or March and has
announced that TD-LTE smartphones will be on retail shelves by mid-2012.
In
China, China Mobile has reaffirmed its commitment to accelerate TD-SCDMA/TD-LTE
development so as to further develop mobile Internet services and enable the
Internet of Things.
China
Unicom’s investment strategy has been to accelerate 3G network building,
optimize 2G network coverage, expedite indoor coverage, and establish WiFi
hotspot zones to increase network capacity.
China
Telecom is focused on rolling out integrated information service projects,
strengthened the integration of wireline and mobile IT platforms, and
implementing risk control systems.
In
India, only 10 to 20 percent of base stations are 3G-based. Operators like Idea
Cellular are adding around 2,000 new cell sites per quarter to their networks
and almost 3,000 3G base stations in base station upgrades and new cell site
deployments.
