2013 LTE Capex and Opex predictions. By 2017, U.S. carriers expected to spend over $90 billion in capex and opex


According to a recent LTE capex and opex forecast published by iGR, Tier One operators (AT&T, Verizon Wireless, Sprint, and T-Mobile USA) and Regional and Small Operators (RSOs) are projected to spend  by 2017 $37 billion in LTE capex and $56 billion in opex.

“US capex spending is forecasted to be 10% of global capex spending and will peak in 2013” said Iain Gillott, President of IGR. “The radio equipment, which includes base station equipment, tower modifications, installation and construction, represents 70% of the $37 billion capex budget, with backhaul and evolved packet core expenditures representing the balance.”

“By 2017, US opex spending by US carriers is projected to be $56 billion,” said Gillott. “and represents expenditures required to keep the network running every month. Specific elements include radio maintenance coupled with ongoing cost of backhaul and transport.”

Key takeaways from the interview include:

  • In 2013, Tier One expenditures will be $10 billion compared to only $750 million by the RSOs.
  • Of the total U.S. LTE infrastructure capital expenditures forecast of $37.5 billion, RSOs are expected to spend only $3.2 billion.
  • Operating expenditures by RSOs are expected to be $2.1 billion, a small percentage of the expected $56.5 billion opex expenditure forecast.
  • iGR’s LTE cost model is based on the amount of data the network is able to support and deliver. The Capex cost model is based on the cost required to add 1 GB of data capacity to the network, while the opex cost model is based on the cost per user per month.
  • Equipment vendors selling to RSOs will need to adjust their sales and product strategy because RSOs will deploy more hosted solutions to include shared packet core and policy engines.

For more information on the report contact Iain Gillott at (512) 263-5682 or by email at [email protected]

About Author

Jeff Mucci

CEO and Editorial Director
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Jeff Mucci acquired RCR Wireless News from Crain Communications in 2009. In addition to providing editorial and strategic direction to RCR Wireless News, Jeff is Managing Partner of Arden Operating Company, a company he founded in 2006 to advise, own and operate companies in the communications, energy and real estate sectors. In 2007, Arden acquired Telecomcareers, a leading industry job board founded in 1999. Over the past 20-plus years Jeff has been involved in many facets of running day to day operations for telecom, wireless, commercial real estate and energy services companies and has raised over $300 million of equity and debt for companies in which he has been involved. Previous roles include Chairman and CEO of ConnectSouth, a regional DSL company backed by Morgan Stanley, Spire Capital and Nautic Partners; President of a facilities based CLEC, which was later acquired by Time Warner Telecom; SVP Sales and Marketing for Clearwire; and Director with P&L responsibility of a nationwide building local exchange carrier (BLEC) offering communications services to over nearly 100 million square feet of office buildings in major markets across the United States. Contact Jeff by email [email protected] or by phone at 512 431 8912.