LONDON—By 2012, W-CDMA technology will rake in the highest capital-expenditure investment by mobile operators—more than $150 billion—according to a new report from ABI Research.
Mobile operators’ attitudes towards capex have changed over the past two or three years,” said mobile wireless research analyst Shailendra Pandey. “They are clearly becoming more focused on an early return on their investments.”
ABI’s report found that greater emphasis on data services is resulting in increased investment in servers and platforms outside the range of traditional wireless equipment. In developed markets there is now more focus on making investments that will improve in-building coverage as well as rollouts of advanced data services such as mobile TV and mobile broadband.
The study also indicated that in order to offer advanced data and content services with improved delivery and reduced network costs, mobile operators will have to invest in more leased capacity, upgrade to microwave technologies and—to boost backhaul capacity—add fiber links where microwave technologies have been exhausted. In addition, operators will have to deploy advanced switching technology in the backhaul network to improve traffic flow and maximize the performance of the backhaul infrastructure.
In 2005, ABI said China Mobile’s capex in was $8.86 billion, more than Vodafone Group plc’s global total capex of $8.74 billion. In North America, Cingular Wireless L.L.C.’s capex investment in 2005 was $7.475 billion, 116-percent more than in 2004 due to Cingular’s investments in building out its W-CDMA network, the report said.
Further, ABI said it expects investment in HSDPA technologies, such as mobile TV and mobile broadband services, to continue expanding.
In the near term, Pandey pointed out that by 2007 a “good number” of mobile operators will begin Internet Protocol Multimedia Subsystems rollouts, enabling them to rapidly deploy and launch enhanced revenue-generating multimedia services.
In a related study, revenue from sales of cellular base stations will remain strong through 2008, but by 2009 base station revenue will begin a steep decline, says a new report from In-Stat.
“Spending on cellular base stations by cellular service providers these last few years has been untypical, as spending on deployment of new W-CDMA networks is much higher than typical had cellular carriers only been maintaining, upgrading, and increasing the capacity of current networks,” explains Allen Nogee, In-Stat analyst. “Once deployment of most of these new networks is complete, yearly spending will drop to more typical levels.”
Recent research by In-Stat found the following:
—New cellular base station revenue will reach $53.2 million in 2006, and is forecast to drop sharply in the years that follow.
—Deployment of WiMAX, Wi-Fi and other wireless technologies will increasingly put pressure on cellular technology.
—In the past few years, base station prices, especially W-CDMA base stations, have been cut to a fraction of their cost of just a few years ago.
