Monday, December 15, 2014

[Ovum]: CSPs CapEx for 2014: $364B; Flat in 2015

A new report by Matt Walker [pictured], Principal Analyst, Ovum, finds that "Revenue growth rates for communications service providers (CSPs) remain modest, but CSPs will continue to invest heavily in their networks .. With global CSP capital expenditures (capex) forecasted to total more than US$2tn from 2014–19, the global analyst firm warns CSPs must continue to do less with more, leveraging new technologies, network designs, vendors, and operating models.

In a new report, Ovum reveals 2014 capex will likely be US$346bn, with fixed CSPs accounting for 41% of the total and mobile the remainder. Ovum expects:

  • flat capex in 2015 due to mobile growing roughly the same amount as fixed capex declines. 
  • The years 2016 and 2017 are likely to be weak capex-wise, for both the fixed and mobile segments. 
  • We expect a modest recovery in 2018–19 as a new wave of fixed broadband, fixed cloud/data center, and mobile broadband upgrades start rolling out in a number of large markets".
See also "[Dell’Oro Group]: Why will Telecom Carrier Capex Decline in 2015?" - here

"..CSPs are also adding software intelligence into their networks, in many ways. Mobile operators have been deploying software-defined radios for many years, which may lower the initial capex requirements of radio upgrades. Software-enabled features also appear in most other parts of the network, even in optical transmission and fixed broadband equipment. Vendors typically spend 50–70% or more of product R&D on software, in fact, revealing its importance to future network operations. And then there are software-defined networks (SDN) and network functions virtualization (NFV). While not necessarily offering immediate capex savings, one clear aim of CSP proponents of SDN/NFV is to lower both operations and capital costs, along with new service/feature deployment.

See "Ovum forecasts CSP capex over 2014–19 period will surpass US$2tn" - here.

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