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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
Jeff Mucci
Jeff is the CEO and Head of Industry Insights for Arden Media Company, publishers RCR Wireless News. Enterprise IoT Insights, In-Building Tech and TelecomCareers. Over the past 20+ years, Jeff has been involved in many facets of running day-to-day operations for telecom, wireless, commercial real estate and energy services companies. He has raised over $300 million of debt and equity for companies in which he has been involved. Previous roles include Chairman and CEO of ConnectSouth, a regional DSL company: President of a facilities based CLEC; SVP Sales and Marketing for Clearwire; and Director of a nationwide BLEC representing over 100 million square feet of commercial real estate. Contact Jeff by email: [email protected] or by phone at 512.431.8912.