Telecom operators’ wireless capital expenditure (Capex) will dip 0.6 percent to $194 billion in 2015, said ABI Research.
Three main reasons will contribute to the flat growth in wireless Capex by telecoms for the current year. First, strong U.S. dollar will impact the purchase power of mobile operators globally. Second, the regional unrest in Middle East and North African regions will result into slow purchase decisions. Third, FCC’s Net Neutrality and Title II classifications negatively impact the investment of network operators in the U.S.
North American wireless operators such as AT&T and Verizon are expecting the percentage of Capex revenue to decline in 2015.
“As LTE reaches universal coverage in North America, operators focus on network densification and user experience optimization. The FCC’s Net Neutrality and Title II classifications also negatively impact the investment sentiment of network operators,” said Lian Jye Su, research analyst, ABI Research.
The telecom analysis report said telecom operators from Europe, Middle East and Africa are committed to their network upgrades and will drive future growth as they target the global enterprise market.
Some of the focus areas of CTOs at wireless operators are heterogeneous and layered, virtualized, software-defined, cloud-based, and self-organizing networks.
Vodafone, Singtel, MegaFon and Softbank, are testing 5G technology. Since 5G mobile technology will be available in 2020, Capex on 5G starts a few years ahead.
ABI Research said the spending will be less on macro basestations and more on small cells and small cell clusters. The deployment of 5G will involve less major hardware swap-outs but rather will be more modular and software centric. Capex in the percentage of revenue will remain stable or even decline.